India estimates $120 billion in aviation investment by 2020

Washington DC
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As much as $120 billion in investments could be absorbed by India's aviation sector by 2020, the country's civil aviation secretary, M Madhavan Nambiar, said on 8 December during the US-India Aviation Partnership Summit in Washington.

Domestic traffic could grow to 160 million and 180 million operations a year by 2020, based on analysts' predictions, he said.

Analysts have also predicted that India's international traffic could exceed 50 million operations a year by 2020. Nambiar said the Indian civil aircraft market was valued at $90 billion, with the sale of 1,000 aircraft between 2008 and 2020.

As more aircraft enter the market, more demand for maintenance, repair and overhaul work will follow. India's MRO sector is expected to reach $1.17 billion next year, followed by $2.6 billion by 2020, the secretary said. In addition to airline-related ventures, investment opportunities related to airport infrastructure abound in India, which faces challenges such as infrastructure bottlenecks, Nambiar said.

 

Because of bottlenecks, the Indian government had already started heavily investing in aviation infrastructure, he said.

India requires $30 billion in airport infrastructure investments, he went on, explaining that it is estimated the country's airports could handle more than 300 million passengers a year by 2020.

India has 82 functional airports, and plans to upgrade about half of these. Nambiar said about $10 billion will be spent on airport upgrades and modernisation efforts by next year.

Mumbai and Delhi airports have already been privatised, and are being upgraded for an investment of about $4 billion.

Kolkata and Chennai airports will also undergo improvements, and 35 other city airports have been proposed for upgrades.

On top of planned upgrades for existing facilities, India aims to build 11 new greenfield airports.

One forthcoming airport, Navi Mumbai, will be developed through a public-private partnership at an estimated cost of $2.5 billion, said Nambiar.

He said airport infrastructure represents a "huge opportunity for investors".

Several efforts are under way or planned to facilitate investments in India.

Earlier this year, the southern state of Karnataka opened the country's first economic zone dedicated to the aerospace sector. Backed by Bangalore-based aerospace and engineering firm Quest Global, the zone opened near Belgaum.

Andhra Pradesh is also developing an aerospace and precision engineering special economic zone, said Nambiar, and the state of Tamil Nadu has proposed an aero park catering to the design, manufacture and maintenance of aircraft.