India - Civil AviationIndia - Civil Aviation
At $16 billion, India’s aviation market is currently the 9th largest in the world and is expected to be the 3rd largest by 2020, and by 2030, the largest. According to International Air Transport Association (IATA), India is the fastest growing domestic market globally, handling over 190 million passengers. Over the next decade, the market is expected to reach 337 million domestic and 84 million international passengers. This growth will create demand for new aircrafts, air navigation service technologies, airport security equipment, and increased infrastructure.
The Government of India (GoI) officials cite the correlation of every 1% increase in GDP with a 2% increase in India’s aviation sector. With India’s increasing GDP growth rate, we expect continuing large increases in its aviation sector growth. According to KPMG, India currently has one of the least penetrated aviation markets in the world with approximately 99% of Indians having never traveled by air and weak connectivity between metros and smaller cities.
The Ministry of Civil Aviation (MoCA) oversees the formulation of policies and programs for development and regulation of the sector. It exercises administrative control over the Directorate General of Civil Aviation (DGCA), the Bureau of Civil Aviation Security (BCAS), the Indira Gandhi Rashtriya Udan Academy, the National Aviation Company of India Limited (Air India), Pawan Hans Helicopters Limited, and the Airports Authority of India (AAI). MoCA released the National Civil Aviation Policy (NCAP) on June 15, 2016. NCAP covers over 22 aspects of aviation and aims to enable a rapid growth of the sector, improve ease of doing business, advance regional connectivity, and capture India’s largely untapped market of 300 million middle-class citizens through affordable services.
A key component of the NCAP is UDAN ('Ude Desh ka Aam Naagrik'), a first-of-its-kind scheme to stimulate regional connectivity by adding flights to under-served locations at subsidized fares. The plan offers viability gap funding to operators to fly to India’s under-utilized airports with a commitment that at least half of the seats will have a price cap. Under the plan, airfare for a 1-hour journey of approximately 500 kilometers on a fixed wing aircraft or for 30-minute journey on a helicopter would be capped at Rupees 2,500 (approximately $38) for at least half of the seats on the flight. An inter-ministerial committee will supervise and be accountable for coordination of the scheme among all stakeholders.
Another priority of the NCAP is the promotion of helicopter, seaplanes and general aviation in order to improve regional connectivity, tourism, law enforcement, and emergency medical evacuation. The NCAP will facilitate the development of at least four heli-hubs and Helicopter Emergency Medical Services. NCAP will also permit helicopters to fly from point to point without prior ATC clearance in airspace below 5000 feet. India’s first heliport, built by state-owned Pawan Hans in Delhi, is fully operational consisting of a terminal building having capacity of 150 passengers, four hangars with parking capacity of 16 helicopters and nine parking bays.
The NCAP also highlights improvement in code share agreements. Designated carriers of India can now enter into international and domestic codeshare routes with foreign carriers as long as the codeshares are in accordance with the existing Air Service Agreements provision and they provide MoCA with 30 day prior notification. The policy also allows Open Skies agreements with SAARC countries and countries beyond 5,000 kilometers from New Delhi.
MOCA has made several provisions in its recent budget towards developing India as a maintenance and repair overhaul (MRO) hub in Asia. Some of the provisions it has included are exemption from customs duties; improved clearance processes for imported parts and components; and enabling the facilitation of appropriate visas and temporary landing permits.
GOI also liberalized its FDI policies for the aviation sector. In an attempt to aid modernization of existing airports, the government is permitting 100% FDI in greenfield and brownfield airport projects. It has also increased foreign investment allowances in Scheduled Air Transport Service/Domestic Scheduled Passenger Airlines and Regional Air Transport Services to 100%.
In April 2015, the Federal Aviation Administration (FAA) restored India’s category one aviation safety rating. FAA had downgraded India's aviation-safety ranking in January 2014. The FAA’s Aircraft Certification Service and India’s Directorate General for Civil Aviation (DGCA) maintain a Bilateral Aviation Safety Agreement with Implementation Procedures for Airworthiness (BASA IPA) to facilitate the exchange of aeronautical products between the two States. Additionally the FAA and India’s civil aviation Authorities continue to explore means by which to enhance cooperation.
Commercial and general and business aviation aircraft
Maintenance Repair and Overhaul (MRO)
Avionics including Communication Systems & Navigation
Airplane and helicopter - rescue and emergency systems
Safety and security
Human Resource Development
Commercial and general and business aviation aircraft - India currently has fewer than 300 civilian helicopters - substantially fewer than other developing nations. With the increased interest to improve regional connectivity, tourism, and emergency medical evacuation, there is substantial opportunity in the General Aviation Business Aviation sector.
Maintenance Repair and Overhaul- India’s young and growing fleet of airplanes will require future maintenance service. 90% of India’s MRO business carriers currently spent outside India – in Sri Lanka, Singapore, Malaysia etc. The GoI continues to try and develop the MRO sector in India.
Avionics including Communication Systems & Navigation – According to the NCAP, AAI is ranked among the top air navigation service (ANS) providers in the world. Upgradation and modernization of ANS in India is in line with global trends. With the launch of GAGAN, India has become the fourth country in the world to use satellite-based navigation system.
Airplane and helicopter parts and components – India’s nascent mark Helicopter Emergency Medical Services (HEMS) holds large potential for global service providers. The increasing urbanization of major Indian cities marked by rapid and unplanned growth, along with high traffic density, makes the need for HEMS even more urgent.
Safety and security – As one of the fastest growing aviation markets in the world, India needs to meet the demands of this growth by ensuring it is implementing effective aviation safety and security at each of its airports.
Human Resource Development- With passengers and aircraft fleet likely to double by 2020, the human resource development infrastructure needs immediate strengthening. Unfortunately, the supply of skilled human resources has not kept pace with the rapid growth in demand.
With its increased interest in improving regional and remote air connectivity, the GoI is advancing $110 billion in civil aviation expansion and modernization projects through 2020. KPMG recently estimated India would require over 250 brown field and green field airports by 2020. The government also plans to revive and operationalize around 160 airports in India. In order to accomplish its goals, the government is involving the private sector in the construction of airports through Public Private Partnerships (PPP), and providing substantial state support in terms of financing, concessional land allotment, tax holidays and other incentives.
There are several large airport projects currently occurring throughout India. Delhi’s Indira Gandhi International Airport is currently undergoing a large expansion in order to increase its cargo and passenger handling capacity. GMR Airports Limited has commenced works for the construction of Mopa International Airport in Goa. Phase I of the project is expected to be completed by May 2020. In addition, GVK is constructing the first terminal building and runway of Navi Mumbai International Airport Project in Mumbai.
The U.S-India Aviation Cooperation Program (ACP) – The ACP was established in 2007 as a public-private partnership between the U.S. Federal Aviation Administration (FAA), the U.S. Trade and Development Agency (USTDA), and other U.S. Government agencies and U.S. companies. The ACP supports the growth of the Indian civil aerospace sector by working directly with the GoI to identify and execute projects that encourage collaboration between U.S. and Indian stakeholders, in the area of aerospace technology and best practices.
U.S.-India Aviation Summit – The U.S. Trade and Development Agency, in partnership with the Government of India and the U.S.-India Aviation Cooperation Program will have an Aviation Summit in 2017. The Summit offers a technical, policy, and commercial forum to assist Indian civil aviation agencies and aviation industry representatives, including Indian private sector airlines and airport operators, identify and specify advanced U.S. technologies and practices that would best suit their expansion and modernization needs.
India Aviation 2018 - The Ministry of Civil Aviation (MOCA) and the Federation of Indian Chamber of Commerce (FICCI) will co-organize India Aviation 2018 in Hyderabad. India Aviation is the largest civil aviation show in India. The exact dates and venue is still to be determined.
Ministry of Civil Aviation
Airports Authority of India (AAI)
Director General of Civil Aviation
CAPA Centre for Aviation India
International Air Transport Association
US-India Aviation Cooperation Program
Ministry of Defense
For more information about opportunities in this sector contact U.S. Commercial Service Industry Specialist: Nisha Wadhawan at Nisha.email@example.com
India Aerospace and Defense Trade Development and Promotion