India's Aviation Market Soars: Growth, Transformation, and Opportunities

Strategic Insights -

India's domestic aviation market has grown rapidly, driven by increasing passenger numbers and policy interventions like the regional connectivity scheme. The country has emerged as the world's third-largest domestic aviation market, with a growth rate of 30% in domestic traffic and a significant increase in international traffic. Indian carriers have placed orders for over 2,000 aircraft, and the government is investing heavily in airport infrastructure to meet the growing demand.

Key Takeaways:

  • India's domestic air traffic registered an annual growth of ~ 10% in April 2025, outpacing the global growth rate of 8%.
  • The government plans to pump over INR 920 billion for the construction of new airports and the expansion of existing ones, aiming to have two hundred airports by the end of this year.
  • Indian operators rely heavily on foreign lessors, with around 80-85% of their fleets on operating lease agreements.
  • The Protection of Interests in Aircraft Objects Act, 2025, has come into force in India, granting rights to lessors to repossess their aircraft and deregister them quickly in case of default by the airline lessee.
  • India wants to develop GIFT City as a global aircraft leasing hub, offering tax benefits to units established in the GIFT City, including a tax holiday for ten consecutive years.
  • The Indian government aims to increase air cargo volumes to ten million tonnes by 2030, fuelling optimism across the industry, supported by major infrastructure upgrades and export-oriented policy reforms.
  • India has a defense budget of ~1.90% of its GDP and spends about 40% of its total defense budget on capital acquisitions, presenting an attractive opportunity across the supply chain.

Statistics:

  • India's domestic traffic has surged 30% and international traffic has risen from 55 million to 72 million.
  • Indian operators have placed orders for over 2,000 aircraft.
  • The government plans to invest INR 920 billion in airport infrastructure.
  • India is expected to have two hundred airports by the end of this year and develop two hundred more in the next two decades.
  • Air freight is expected to grow significantly, with the Government's target to increase air cargo volumes to ten million tonnes by 2030.
  • The Indian defense budget is ~1.90% of its GDP, with 40% spent on capital acquisitions.

Sources:

  • "Protection of Interests in Aircraft Objects Act, 2025" (Government of India)
  • "India's Aviation Market Soars: Growth, Transformation, and Opportunities" (BTG Advaya)
  • "Flying Freight: Development of air cargo market" (BTG Advaya)
  • "Wings of Self-reliance: India's defense manufacturing" (BTG Advaya)
  • "Gift City and aircraft leasing" (BTG Advaya)
  • "India's Air Cargo Market to Reach 10 Million Tonnes by 2030" (Government of India)