Sucheta Dalal :Indian aviation can absorb $120 billion in investments by 2020
Sucheta Dalal

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Indian aviation can absorb $120 billion in investments by 2020  

December 9, 2009


The rapidly-expanding aviation sector of India can absorb as much as $120 billion in investments by the year 2020, civil aviation secretary Madhavan Nambiar has said.

"As per reports, the Indian aviation sector has the potential to absorb up to $120 billion of investment by 2020. Analysts predict that domestic traffic can reach 160 million-180 million by 2020, with the international traffic in excess of 50 million," Mr Nambiar said in his keynote address to the US-India Aviation Partnership Summit in Washington, reports PTI.

The summit is being attended by around 200 corporate leaders from the sector from both India and the US. "Airport infrastructure in India is the one area which has huge opportunity for investors. The airport upgrade action and modernisation plan, launched by the government of India, will see an investment of approximately $10 billion by 2010," he said.

Mr Nambiar said that the Indian aerospace industry is one of the fastest-growing aerospace markets in the world, driven by continued economic growth, resulting in growing passenger traffic and domestic aircraft demand.

"As per estimates, the Indian civil aircraft market is valued at $90 billion involving sale of 1,000 aircraft during the period 2008 to 2020. At present, the sector has around 407 aircraft with almost the same number on order as well," he said.

In 2008, scheduled operators and companies were given permission to import 62 aircraft.

"However, it is a fact that the current downturn has seen many deliveries being deferred, but significantly not cancelled. It is in this growth that lies our challenge in creating safe, secure, efficient and environment-friendly systems conducive to meet this growth," he said.

India is also emerging as a potential international hub for manufacturing and Maintenance, Repair & Overhaul (MRO) on the back of its talent and engineering workforce, manpower cost competitiveness, fast-developing engineering services, research and development (R&D) expertise and strategic position in South-east Asia.

"India’s MRO segment is estimated to grow at 10%, reaching $1.17 billion by 2010 and $2.60 billion by 2020," Mr Nambiar said.

Aerospace products have also emerged as the fastest-growing component of US exports to India. Mr Nambiar said that the successful retention of India in Category-I status by the US Federal Aviation Administration (US-FAA) has helped India bring back aviation safety into the spotlight. "This reaffirms that Indian safety standards are compliant with international safety standards," he noted.

The FAA audit under the International Aviation Safety Assessment Programme gives the Directorate General of Civil Aviation (DGCA) a level playing field in the area of safety and maintenance standards.

This, Mr Nambiar said, paves the way for allowing Indian carriers to expand service into the US by adding flights through new access points and code-share agreements with US carriers.
— Yogesh Sapkale

-- Sucheta Dalal