Advantage India
Robust
Demand
* Rising working group and widening middle-class demography is expected to boost demand.
* India has envisaged increasing the number of operational airports to 220 by 2025.
* India will require over 2200 aircraft by 2042.
Opportunities
in MRO
* Growth in aviation accentuating demand for MRO facilities.
* As of 2024, expenditure in MRO accounts for 12-15% of the total revenue; it is the second-highest expense after fuel cost.
* Union Budget 2024-25 introduces incentives to boost MRO activities in aviation, including extending export and re-import periods for repairs and implementing a 5% uniform IGST on aircraft parts.
*In June 2023, the US committed to creating a global hub for MRO for high-end drones in India.
Policy
Support
* As per the present FDI Policy, 100% FDI is permitted in scheduled Air Transport Service/Domestic Scheduled Passenger Airline (Automatic upto 49% and Government route beyond 49%). However, for NRIs 100% FDI is permitted under automatic route in Scheduled Air Transport Service/Domestic Scheduled Passenger Airline.
Increasing
Investments
* India’s aviation infrastructure received over Rs. 96,000 crore (US$ 11.2 billion) in capital expenditure between FY20 and FY25 through the Airports Authority of India and public-private partnerships.
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