The Indian aviation sector continues to soar, and the best is yet to come
Total passenger traffic has grown from around 120 million to over 236 million per annum.
Ready for Take-off
Over the last decade, Indian aviation has taken a significant leap. The number of airports has more than doubled—from 74 to nearly 160. Total passenger traffic has grown from around 120 million to over 236 million per annum. Aircraft fleet has doubled from around 400 to over 800 and is likely to cross 1,500 by 2030. In 2024, India’s domestic traffic grew by 6%, the highest in the world after China. India has overtaken Spain and the UK to become the third largest aviation market.
With the planned opening of airports at Jewar and Navi Mumbai, and the expansion of major airports nearing completion, the ‘Summer of 2025’ is expected to be memorable. This may have a multiplier effect on associated sub-sectors like cargo, Air Navigation Services (ANS), Maintenance, Repair and Overhaul (MRO), ground services, IT systems, and retail, boosting investments and employment.
The tailwinds
To draw the interiors of India onto the aviation grid, the National Civil Aviation Policy (NCAP 2016) launched several initiatives: the most prominent being the Regional Connectivity Scheme–Ude Desh ka Aam Naagrik (RCS–UDAN). Over 15 million passengers have flown on UDAN routes as of January 2025.
The leasing of India’s leading airports to the private sector in the last two decades led to a significant transformation. Privatisation of the national carrier has helped in substantial capital infusion, fleet augmentation and improved quality of service.
Global hub by 2030
Indian carriers are now focusing on expanding their reach beyond India’s borders, especially on long-haul routes. The combined efforts of the government, industry and associated stakeholders create a strong platform for India to become a global aviation hub by 2030.
World-class airports: Leading Indian airports can benchmark against the top five in the world for infrastructure quality, use of technology, paperless movement, efficient operations, sustainable practices and overall passenger experience. High quality retail and commercial infrastructure at the airports can help cross-subsidise airline tariffs. Strengthening the Airport Collaborative Decision Making (ACDM) system could ensure seamless data-sharing between ANS, airports, airlines, statutory bodies and associated entities. Streamlining transshipment of cargo and baggage could speed up operations. Piloting a common security hold for arrival and departure passengers could help reduce costs and in faster aircraft turnarounds.
Efficient airspace management: ANS infrastructure, manpower and training levels require continuous augmentation. Optimising aircraft separation protocols and upgrading the rated capacity of Indian airports could increase the number of aircraft movements per hour. Use of GAGAN—the satellite-based augmentation system jointly developed by ISRO and AAI—could be encouraged to increase airspace capacity and help reduce the cost of ANS infrastructure at regional airports.
Leave no one behind: Cargo, ground handling, general aviation and MRO entities form a critical part of the aviation value chain but often complain of unfair treatment by airports and airlines. They also face regulatory challenges in day-to-day operations. It would be important to address their demands and need for financial sustainability. Cargo processing would need to be completely paperless and dwell times would need to be reduced to global standards. Greater attention could be given to challenges faced by India’s general aviation sector in terms of multiplicity of approvals, operational restrictions, fractional ownership, and taxation etc.
Leading aerospace players in India could consider increasing their R&D spend, enhancing design capabilities and exploring global acquisitions.
Make in India: Domestic manufacturing of aircraft and components would need to be taken up on priority, like in the space sector. A combination of Production Linked Incentives (PLIs), fiscal incentives, and defence orders with larger offset commitments from original equipment manufacturers (OEMs) could support the production of aerospace-grade raw materials and provide a safety net to Tier I and II suppliers from high liabilities. The aerospace ecosystem would need to be consolidated at three to four locations rather than being fragmented. Leading aerospace players in India could consider increasing their R&D spend, enhancing design capabilities and exploring global acquisitions.
Repair in India: Despite several policy reforms, MRO lags in India, with nearly 85% of Indian carriers’ MRO expenditure flowing out of the country. Indian MRO providers compete against global MRO hubs, many of whom enjoy zero taxes and zero airport royalties. Treating end-of-lease redelivery check as a ‘deemed export’ could help bring this business to India. The government-owned AIESL has good infrastructure, knowledge and people. Its divestment, like its parent airline, could help to strengthen the MRO sector.
Lease in India: Leading Indian financial institutions could invest more deeply in the growing aircraft leasing business. They could also look at setting up branches in global aircraft leasing hubs like Ireland—through the inorganic route. Repossession of aircraft by lessors could be made seamless in line with the Cape Town Convention, 2001, and global best practices. This could help build trust and reduce the high leasing charges that Indian carriers incur.
Unleashing a drone revolution: Drones could potentially transform the future of the aviation industry. The sector has received support through initiatives like the liberalised Drone Rules, 2021, PLI scheme, agri-drone subsidies, etc. It would need to evolve from an assembly hub to a design hub and reduce its dependence on imported components. Drones can have real impact in Beyond Visual Line of Sight (BVLOS) operations, e.g. in logistics, imaging and drone taxis; and enabling these could be prioritised.
Skill in India: The expansion in Indian aviation will need a robust talent pipeline. The industry could collaborate with IITs, IIMs, universities, flying schools and other institutions to make India a regional talent hub. Leading airlines and airports may establish their own training institutions or acquire existing ones. Civil-military collaboration can enable reemployment of highly trained military pilots, engineers, drone operators, ANS personnel and ground staff in the private sector.
Sustainable aviation: Two leading Indian airports have achieved the highest Level 5 of Carbon Accreditation of the Airports Council International. Others would need to emulate this at the earliest. India has set a target of 1% Sustainable Aviation Fuel (SAF) blend by 2027, 2% by 2028, and 5% by 2030. This opens growth opportunities for India’s biofuels and agriculture sector.
Passenger experience: Leaders of the Indian aviation industry would need to engage closely with the government, regulators and the traveling public. Addressing passenger concerns around safety, security, connectivity, affordable tickets, timely grievance redressal, etc., would be important.
The Indian aviation industry is at the cusp of breakout growth. Many macro issues have been resolved. The journey to becoming a global aviation hub by 2030 may face some challenges, but with a determined approach and close collaboration between the industry, government, academia and other stakeholders, India has the potential to surprise the world. 
The author is Amber Dubey, Senior Advisor, Mckinsey & Company, and Former Joint Secretary at Ministry of Civil Aviation, Government of India. Views are personal.
