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India's civil aviation sector continues to expand steadily, driven by supportive policies, rising demand and infrastructure growth, the Economic Survey said in the past week. The country, now the world's third-largest domestic aviation market, handled over 412 million passengers in FY25, with traffic expected to reach 665 million by FY31. While airport numbers have more than doubled since 2014, India still has low airport density, highlighting growth potential. Passenger and cargo traffic remain resilient, though domestic demand showed some moderation during part of 2025.
India's civil aviation sector continues to record steady expansion, supported by policy stability, rising passenger demand and consistent infrastructure development, according to the Economic Survey released in the past week. The report noted that the overall environment has helped the sector remain on a sustained growth path despite global uncertainties. Advertisement
The Survey pointed out that as India seeks to position itself as a global aviation hub, domestic airports have the potential to attract international transit traffic. It stated that airports can aim to become global hubs by encouraging layovers and improving the overall transit experience for international passengers. The report also highlighted that current passenger volumes represent only a small part of the country's long-term aviation potential, even though the sector remains sensitive to global economic cycles and requires continuous capacity upgrades.
India is currently the world's third-largest domestic aviation market. The number of operational airports has risen sharply to 164 in the last year, compared to 74 in 2014, reflecting focused efforts on regional connectivity and airport expansion. During FY25, Indian airports handled around 412 million passengers, and traffic is projected to rise to nearly 665 million passengers by FY31, indicating strong medium-term demand.
Despite this progress, the Survey underlined the significant gap in airport availability. India operates roughly 0.11 airports per million people, far lower than the United States, which has about 47.35 airports per million, and China, with around 0.39. This gap points to considerable room for further airport development across the country.
The report also noted that expansion in airport and air navigation infrastructure, along with the growth of allied services such as Maintenance, Repair and Overhaul and aircraft leasing, is strengthening the aviation ecosystem. According to the Survey, these developments, combined with increased use of technology, are positioning civil aviation as an important driver of economic connectivity and regional integration.
Around the same time, Prime Minister Narendra Modi highlighted India's growth potential and policy continuity while addressing investors through a message at an aviation summit. He indicated that the country offers strong opportunities in areas such as aircraft manufacturing, pilot training, advanced air mobility solutions and aircraft leasing. He also said the government is working on regulatory reforms aimed at making air cargo movement faster and more efficient.
The Survey observed that aviation services continue to play a critical role in supporting passenger mobility and cargo movement. In FY25, total air passenger traffic rose by 9.4 percent to about 411.8 million passengers. However, growth moderated during the April-November period of 2025, when passenger traffic increased by 3.5 percent year-on-year, mainly due to flight disruptions and short-term demand adjustments in the domestic segment.
Air cargo activity has also shown consistent improvement. Cargo volumes increased from 2.53 million metric tonnes in FY15 to 3.72 million metric tonnes in FY25. In FY26, cargo handling stood at around 2.95 million metric tonnes up to December, supported by policy reforms and targeted initiatives aimed at strengthening logistics and trade flows.
Source PTI
FAQ
Q1. What does the Economic Survey say about the current state of India's civil aviation sector?
The Economic Survey notes that India's civil aviation sector is witnessing steady and sustained growth, supported by a stable policy environment, rising passenger demand, and continuous infrastructure expansion. Despite global economic uncertainties, the sector has remained resilient and is positioned as an important driver of connectivity and economic integration.
Q2. How large is India's aviation market today and what are the growth projections?
India is currently the world's third-largest domestic aviation market. During FY25, Indian airports handled about 412 million passengers, and passenger traffic is projected to increase to around 665 million by FY31, indicating strong medium-term growth potential driven by rising incomes, urbanisation, and improved regional connectivity.
Q3. What progress has been made in airport infrastructure development?
The number of operational airports in India has more than doubled, rising from 74 in 2014 to 164 in the last year. This expansion reflects government focus on regional connectivity and infrastructure creation. However, the Survey highlights that India still has low airport density, operating only about 0.11 airports per million people, compared with 47.35 in the US and 0.39 in China, underscoring significant scope for further development.
Q4. How does the Survey view India's ambition to become a global aviation hub?
The Survey states that Indian airports have the potential to evolve into global aviation hubs by promoting international layovers and improving transit facilities for overseas passengers. Enhancing passenger experience, upgrading infrastructure, and expanding capacity could help India attract a larger share of global transit traffic over time.
Q5. What trends were observed in passenger traffic growth during FY25 and FY26?
Total air passenger traffic increased by 9.4 percent in FY25 to about 411.8 million passengers. However, growth moderated to 3.5 percent year-on-year during April-November 2025, mainly due to flight disruptions and short-term adjustments in domestic demand, even as overall traffic remained resilient.
Q6. How has air cargo performance evolved in recent years?
Air cargo activity has shown steady improvement, rising from 2.53 million metric tonnes in FY15 to 3.72 million metric tonnes in FY25. In FY26, cargo handling reached around 2.95 million metric tonnes up to December, supported by policy reforms, logistics upgrades, and initiatives to improve trade efficiency.
Q7. What allied aviation sectors are strengthening India's aviation ecosystem?
The Survey highlights growth in allied segments such as Maintenance, Repair and Overhaul (MRO), aircraft leasing, and air navigation services. Combined with increased adoption of technology and regulatory reforms, these areas are helping build a more robust and self-sustaining aviation ecosystem.
Q8. What opportunities has the government highlighted for investors in aviation?
Prime Minister Narendra Modi has pointed to strong investment opportunities in aircraft manufacturing, pilot training, advanced air mobility, aircraft leasing, and air cargo infrastructure. He also emphasized ongoing regulatory reforms to make cargo movement faster and more efficient, reinforcing India's long-term aviation growth outlook.
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