The aviation industry in India is among the fastest growing globally. It has shown a growth rate of 18% per year. The open policies of the government have led many foreign players to take an interest in this sector. In fact, private participation constitutes around 75% of this sector. India is fast becoming a major player in the global aviation market.
Some factors that have driven the growth of this sector are: increased purchasing power, lower airfares due to the arrival of low-cost airlines, the emergence of India as a tourist country, more foreign travel and economic progress.
growth potential
The entry of low-cost airlines pioneered by Air Deccan helped greatly reduce the costs involved in flying. This helped attract consumers for whom air travel was just a dream. Now several low-cost airlines operate in India namely Go Airways, Spice Jet and Kingfisher Air and they have a major share in the Indian aviation industry.
Hence, the domestic share in this industry in India is projected to grow by 25-30% and internationally by 15%, increasing the potential customers by around 100 million in 2010. Furthermore, by 2020 the section of load increases to approximately three million. lots.
In addition to these factors, government initiatives are one more boost for this industry. His plans to modernize infrastructure and develop more international airstrips are also proving to be a boost for this industry. New airports will be built to handle more traffic and relieve pressure on existing airfields. The modernization of runways in metropolises is also being planned. All these initiatives are through public-private partnerships.
Aviation policy in India
Indian government policies encourage foreign participation.
The government allows 100% FDI through the automatic route for greenfield airports. In addition, foreign investment is allowed up to 74% through direct approvals, while special permits are required for 100% investment.
Private investors can establish general airports and captive runways keeping a distance of 150 km from the existing ones. Full tax exemption is also granted for 10 years.
About 49% of FDI is allowed for investments in domestic airlines through the automatic route. However, this option is not available to foreign airlines. Full ownership of the capital is given to NRIs (Non-Resident Indians). Foreign direct investment is allowed up to 74% for non-scheduled and cargo airlines.
Thus, all these policies promote foreign investment in this industry.
future scope
The Indian aviation industry is forecast to grow dramatically in the coming years. The 2020 Vision announced by the Ministry of Civil Aviation includes building infrastructure to serve 280 million customers.
Investments worth US$110 billion are forecast for 2020. Around US$30 billion are estimated for the development and improvement of existing airports and US$80 billion for the construction of new fleets. Aerospace giant Boeing projects that the Indian aviation industry will require some 1,000 commercial aircraft in the next 20 years.
Related areas such as repairs, maintenance and training also offer good investment potential.
Therefore, in general it is a very promising sector and a powerful investment area.