The aviation industry in India contributes $72 billion to GDP and is growing rapidly. India has over 400 airports, with 125 owned by the Airport Authority of India which manage most domestic and some international passenger traffic. Aviation in India includes both military and civil aviation and is the fastest growing aviation market globally. The government's UDAN regional connectivity scheme is driving growth in civil aviation infrastructure. FDI in aviation has increased over time and the government continues initiatives to liberalize FDI policies to further develop the industry. However, the industry faces challenges from infrastructure constraints, fuel costs, and other economic and environmental factors.

1. Aviation Industry

2. Aviation Industry
• The Aviation sector in India currently contributes $72 bn to GDP.
• India has 464 airports and airstrips, of which 125 airports are owned by Airport
Authority of India (AAI). These 125 AAI airports manage close to 78% of domestic
passenger traffic and 22% of international passenger traffic.
• Aviation in India, broadly divided into military and civil aviation, is the fastest-
growing aviation market in the world according to the International Air Transport
Association (IATA).
• The hub of the nation's aviation manufacturing industry is at Bangalore which has
a 65% share of this economic sector.
• The government's UDAN (regional connectivity scheme) is driving the growth of
civil aviation and aviation infrastructure in India.
• Air transport represents a small share of GDP but is closely linked to the activities
of other sectors, especially airports and aircraft manufacturing – collectively
considered here as the “aviation industry”. The aviation industry is a key enabler of
many other economic activities.

4. Key Trends and Government Initiatives

5. Impact of COVID 19

7. GDP
• The growth in the Indian economy has increased the Gross Domestic Product
above 8% and this high growth rate will be sustained for a good number of years
• Air traffic has grown enormously and expected to have a growth which would be
above 25% in the travel segment
• In the present scenario around 12 domestic airlines and above 60 international
airlines are operating in India
• With the growth in the economy and stability of the country India has become one
of the preferred locations for the trade and commerce activities
• The growth of airlines traffic in Aviation Industry in India is almost four times
above international average
• Aviation Industry in India have placed the biggest order for aircrafts globally
• Aviation Industry in India holds around 69% of the total share of the airlines traffic
in the region of South Asia.

8. Factors affecting Aviation Industry
• Competitors
• Fuel price
• Interest rate
• Exchange rate
• Global events
• Government policies

9. Influence of FDI on Aviation sector in India
• FDI inflows in India’s air transport sector reached US $1904.37
million between April 2000 and June 2019.
• FDI policy of India has liberalized the foreign investment through
foreign investment promotional board.
• FDI up to 100% by NRIs in Air India.
• FDI in Air India Ltd including that of foreign airlines shall not exceed
49%.
• 100% FDI is permitted in scheduled Air Transport service/Domestic
scheduled passenger airlines.
• 100% FDI under automatic route in helicopter/seaplane services
requiring Directorate General of Civil Aviation(DGCA) approval.

10. FDI initiatives
• The investment is divided in three category-Airport, air transport
services and other services(MRO).
• 300 business jets, 300 small aircraft and 250 helicopters are
expected to be added in Indian fleet.
• Demand of MRO facilities is increasing in India.
• USD 3 billion investment opportunity in greenfield under PPP at
Navi Mumbai and mopa(goa)
• Airport authority of India aims to bring around 250 airports under
operation by 2020.

11. SWOT analysis of FDI on aviation
Strengths- • 60 million International Passengers.
• Largest Peninsula.
• Abundance of natural resources.
• Abundant supply of labour forces
Weakness- • Income inequality.
• Political instability.
• Insufficient infrastructure
Opportunities- • National civil aviation policy-2016.
• UDAN- regional connectivity scheme.
• Affordable flying charges.
• Enhanced skill development schemes.
Threats • Problems in open sky policy.
• Lack of latest technology.

12. Challenges in Aviation Industry
• Infrastructure constraints
• Route dispersal guidelines (RDG)
• Competitiveness
• Aviation turbine fuel
• Takeoff and landing slots.
• Covid – 19
• Rupee depreciation

13. Suggestions
To promote a sustainable trajectory for the aviation industry, government
policies should prioritize sector-wide measures and competition. In particular
they need to:
• Strike the balance between the need for support and the risk of distorting
competition
• Preserve business dynamics and allow exit.
• Encourage investments in the green transition
• Address sustainability along the whole aviation value chain.

14. Thank you