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India aviation: Critical enabler towards 5 trillion dollar economy?

With India already standing in the ranks as the third largest domestic aviation market, can continued growth push the country's efforts to achieve a US$5 trillion economy?

India aviation: Critical enabler towards 5 trillion dollar economy?
  1. Government of India claims COVID-19 has actually helped its aviation market.
  2. How will airports factor into building the economy?
  3. Year on Year from 2019 through 2021 expected to maintain levels without drops.

India aviation is set to develop 200 airports within the next 4 years the Civil Aviation Minister of the Government of India, Mr. Hardeep Singh Puri, said today. He said that COVID-19 has provided new opportunities to the Indian civil aviation sector. “Today, India is the third largest domestic aviation market and poised to become third largest in the overall civil aviation market very soon. The Indian aviation sector has grown exponentially in [the] last few years and is one of the critical enablers as well as an indicator for India’s endeavor towards a US$5 trillion economy,” he added.

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Addressing the virtual session, “The Future and Dynamics of the Civil Aviation Sector: Making India an Aviation Hub,” organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) during the Aero India 2021 – 13th Biennial International Exhibition & Conference, Mr. Puri said, “The PM’s vision of Atmanirbhar Bharat is not just about manufacturing for the world, it is also about creating jobs, and the aviation sector has [been a] significant multiplier effect on job creation.”

Talking about the government’s vision of 2040, Mr. Puri said that the vision talks about India as an aviation hub. India’s aviation infrastructure has benefited from recent upgrades in recent years, and India has the capacity to develop an effective infrastructure. To fully realize its potential, the government is focusing on policies to add remote and regional areas to the map of Indian aviation, Mr. Puri explained.

Elaborating on the expansion of airports in the country, Mr. Puri said that they will be adding 100 new airports by 2024, and the figures indicate a mammoth opportunity in Indian civil aviation sector. Highlighting the importance of the air cargo sector, he said that the resilience shown by the Indian air cargo sector despite challenges posed by the pandemic drives home the benefit that has been brought through policy changes and recalibration of business models. “We expect that we may close the year 2021 at the same level of 2019-20,” added Mr. Puri.

He further said that currently the helicopter potential in India is well below the potential of a country as large as India. There is a growing requirement of helicopters for civil use in tourism, mining, corporate travel, air ambulance, and homeland security. Similarly, efforts are on to establish India as an Maintenance, Repair and Overhaul (MRO) hub. To promote MRO services, he said the government has taken many measures like reduction of Goods and Services Tax (GST) on MRO services reduced. This will not only allow foreign partners to establish in India but benefit Indian companies as well. “India now stands poised to enter [the] US$5 billion aircraft spares market in a significant way,” he added.

The Secretary for the Ministry of Civil Aviation, Government of India, Mr. Pradeep Singh Kharola, while highlighting the potential of the Indian aviation sector said that people now want to travel from point to point, and this is an opportunity for carriers. “We are working on the air services agreement to provide a level playing field to our carriers,” he stated.

He further noted that currently, there over 100 operational airports in India, and the government is targeting to develop 200 airports in the next 4 years including airports, heliports, seaports, and advanced landing grounds. “The unique feature in this would be inviting Pubic Private Partnership (PPP). We had very successful PPPs, and we are looking for more private investment which will make airports a hub of economic activity,” added Mr. Kharola.

The Chairman of the FICCI Civil Aviation Committee & President and Managing Director of Airbus India, Mr. Remi Maillard, said COVID-19 has given an opportunity to India to turn into an international hub. Indian carriers have a competitive advantage, and this must be leveraged into developing long-haul flights. “We have discovered that resilience is very important. We have never compromised on safety, as aviation means safety,” he added.

The FICCI Civil Aviation Committee Co-chair & President and Country Head of Pratt & Whitney India, Ms. Ashmita Sethi, said that India will continue to grow as the fastest-growing market, and we need to nurture innovation and start-ups and skill development. “We should incentivize manufacturers and OEMs to scale-up in India,” she added. 

Ms. Usha Padhee, Joint Secretary, Ministry of Civil Aviation; Mr. Amitabh Khosla, Country Director, IATA; Mr. Wolfgang Prock-Shauer, COO, Indigo; Mr. Salil Gupte, President, Boeing India; Mr. D Anand Bhaskar, MD & CEO, Air Works, also shared their perspectives.

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