India's aviation sector to witness unprecedented growth

The Indian aviation sector is poised for unparalleled expansion, the Economic Survey 2023–24, tabled by Finance minister Nirmala Sitharaman on Monday, stated. The total order book consists of over 1,500 aircraft across airlines and a projected demand for more than 2,200 aircraft by 2042.

The Department of Economic Affairs prepares this yearly report, released ahead of the Union budget, to evaluate the status of the economy and provide short and medium-term forecasts.

According to this survey, the civil aviation industry in the country has enormous potential because of the country’s favorable demographics, growing economy, tourism, expanding demand, higher disposable incomes, and greater accessibility of aviation infrastructure.

Future of Aviation

With millions more people taking to the sky, India’s economy is expected to grow to become the third largest in the world by 2027, requiring hundreds of planes and numerous airports.

“The future of aviation services in India is anchored in the growth of the Maintenance, Repair, and Operations sector and the burgeoning drone industry. India aims to become a global drone hub by 2030, supported by liberalised regulations and incentives,” the survey read.

According to the survey, the aviation industry saw a notable 56% increase in credit inflows year over year. This development was credited to improved hiring, leasing of aircraft, and an optimistic medium- to long-term growth outlook.

Indian Aviation Sector

The majority of aircraft operated by Indian airlines are now leased from offshore lessors who have access to inexpensive capital costs; this indicates that the survey also highlighted the potential in the aircraft leasing industry in India, particularly with the International Financial Services Centre (IFSC) at GIFT City.

“The number of airports in India has more than doubled since 2014. However, there is a need to augment this capacity by adding more airports as well as expansion/upgradation of existing airports in the next five years,” the survey stated.