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The Indian aviation sector has experienced remarkable growth over the past decade, driven by the liberalization of airspace for private players and the rise of low-cost carriers. Between 2004-05 and 2012-13, the industry expanded at a compound annual growth rate (CAGR) of 14%, making India the ninth-largest aviation market globally. In 2013-14, domestic passenger traffic reached 122.43 million, marking a 5.2% increase from the previous year, while international passenger traffic rose by 8.34% to 43.03 million.

Projections indicate that India could become the world’s third-largest aviation market by 2020. Over the next 5-6 years, domestic airlines are expected to double their combined fleet size to 800 aircraft. Additionally, the aviation sector is set to attract investments of approximately US$120 billion within the next five years.

The Confederation of Indian Industry (ITA) has been actively collaborating with the government and regulatory bodies to foster a dynamic, investor-friendly, and customer-centric aviation ecosystem. It has engaged stakeholders to advocate for rationalized sales tax on aviation turbine fuel (ATF), a major cost component for airlines, and has pushed for a more liberalized regulatory environment. In the past, ITA has formed a National Committee on Aviation and Core Groups to serve as a crucial link between the industry and policymakers.

With the government approving six new start-up airlines—three with national permits and three with regional licenses—the industry is poised for another phase of rapid expansion. This growth, while promising, will also bring challenges in terms of policy and regulation. As a key industry representative and partner in economic development, ITA remains committed to providing strategic policy recommendations to ensure that Indian aviation remains both sustainable and affordable.

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