Why this is important to Wisconsin businesses: The Indian government is focusing on opening new airports and making flying affordable for the average citizen.
The Indian aviation market is witnessing a boom, with passenger traffic increasing at a rapid rate. With a market size of $16 billion, India is one of the fastest-growing aviation markets, and currently the ninth-largest in the world. Total passenger traffic stood at 224 million in FY16, a 17 percent increase over the FY15 total of 190 million. It is expected that by 2020, passenger traffic at India’s airports will increase to 421 million, making it third-largest market in the world.
Growth of India’s aviation industry can be attributed to rising disposable income, construction of airports, the presence of several low-cost carriers, liberalizing FDI policies, increasing adoption of new technology, and a focus on improving regional connectivity. The government of India’s UDAN regional connectivity program aims to make flying affordable for the average citizen.
India has more than 86 international airlines that operate flights to and from 55 countries on more than 300 routes. The fleet size of Indian carriers is expected to grow to 1,740 aircraft in the next 20 years, from the current number of just over 500.
The country recently approved a new civil aviation policy, and plans to add 50 new airports in the next three years to boost regional connectivity. Currently, there are 125 operational airports, around 30 non-operational airports, and more than 400 airstrips.
In 2016, the Indian government revised its FDI policy in the civil aviation sector to allow 100 percent FDI in airlines (previously only 49 percent was allowed) and through an automatic route in greenfield projects; brownfield projects; helicopter and seaplane services; ground handling services; maintenance, repair and overhaul (MRO), flight training institutions and technical training institutions.
The domestic industry for aircraft MRO is seeing rapid growth and successful implementation of National Aviation Policy, and is expected to increase its annual revenues to $1.2 billion from $800 million. At present, domestic scheduled carriers outsource most of their MRO activity to third-party service providers outside the country. Indian private carriers are heavily reliant on foreign MRO service providers for engine management contracts, component contracts and heavy base checks.
The U.S-India Aviation Cooperation Program is the mechanism through which Indian aviation sector officials can work with U.S. civil aviation representatives to highlight specific areas for technical cooperation.
U.S. aviation exports to India totaled $1.9 billion in 2015-16. The industry has great potential for Wisconsin aviation companies in MRO, training, greenfield and brownfield airport projects and spare parts.