India's government will form a high level committee to examine options to improve the development of "aviation hubs" in the country.
The inter-ministerial group will examine a range of issues that are seen as bottlenecks to the development of India as a regional aviation hub, a government press statement said.
It will examine a number of areas such as promoting India as a tourist destination, expanding the availability of visa on arrivals to more nationalities, aviation fuel prices, issues related to transshipment cargo, and MRO issues.
Although India has enjoyed rapid traffic growth in recent years, it has failed to become a significant international air hub despite its strategic location between Asia-Pacific and Europe.
In June 2012, India's ministry of civil aviation called for stronger international air hubs within the country to stem a "leakage" of international passengers to major overseas hubs.
The ministry stated that international traffic originating or terminating in India for the year ended March 2011 was 37 million. Of this total, 22 million passengers flew directly to their destination, while 15 million connected through a hub outside India. Of this 15 million, it said 11.4 million comprised a "leakage" of passengers that could potentially flow through a hub within India such as New Delhi or Mumbai, as opposed to an overseas hub such as Dubai or Singapore.
The ministry gave a number of reasons for the relative immaturity of India's hubs, such as the Indian carriers' lack of scale compared with major international carriers such as Emirates, Etihad, Lufthansa and Singapore Airlines. It also blamed India's tax regime, "legacy processes" at Indian airports and the ability of foreign carriers to reach India's tier II cities.
It added that fuel prices are 10-18% higher at Indian airports such as New Delhi and Mumbai than at rival hubs.