Given its strong growth and potential, the Indian civil aviation market is expected to become the world’s third-largest in 2025, much ahead of the projected timeline of 2027, according to consultancy Deloitte.

“The country is forecast to have a demand for a record 2,100 new aircraft, worth $290 billion, with the majority of these being single-aisle planes. The demand will primarily support the growth of low-cost carriers, which account for more than 60 per cent of the total flights in the country,” said Alaric Diniz, Director, Deloitte India.

Growing demand

Diniz said that with a global economic recovery under way and heightened demand for passenger travel, the commercial aircraft sub-sector is expected to grow at 4.8 per cent annually.

Led by India, South Asia is expected to witness an 8 per cent rise in passenger growth over the next 20 years.

Diniz referred to a number of initiatives of the Centre to attract investments in the aviation and defence sectors — 100 per cent FDI with government approval; increased international engagement; updated defence procurement procedures with amendments to the offset regulations, and the strategic partnership model focussed on key sub-sectors such as fighter aircraft, — and said these would add to the growth momentum.

Citing Deloitte’s ‘2018 Global Aerospace and Defence Industry Outlook’, he said there is potential for huge growth in several of the country’s unserviced cities, where there is focus to develop aviation infrastructure.

JV potential

On the potential for joint ventures, the Deloitte India Director said India and West Asia are likely to be hotspots for cross-border ventures in both commercial aircraft and defence sector on account of changes in regulations, access to new technologies and the need for local partners.

Diniz also spoke of the potential of acquisitions in sectors related to space, data analytics, cyber security and advanced technologies, where large contractors are likely to buy out small- and medium-sized players.

For global payers across various sectors, India is a huge consumption story with the economy projected to see a steady growth. To further harness the potential and support the huge demand, the government will have to strengthen the support infrastructure, including expanding existing airports, setting up new ones, and coming out with micro-policies to push the growth of the MRO sector and tech support.

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