How Is Air Connectivity Catalyzing India's Growth

Entrepreneur

03-06-2025

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In 10-15 years India's aviation industry has potential to evolve into a 10 billion dollar market by domestically manufacturing avionics, structural components and electronics. With 2,200 aircraft orders expected to reach India, there is unprecedented scope of growth in the sector. "It's just the beginning of the aviation boom in India. Manufacturing and trade are critical components of the vision of making India grow further in the sector," said Ananth Narayanan, Senior Vice President & Chief Industry Officer, Invest India.
Stating Infrastructure as one of the key growth drivers in India, Narayanan added that connectivity is a crucial factor that foreign investors often look for, before investing in India. There are high frequency indicators of consumption and finally the Indian economy is growing at scale. "About 75 to 80 percent of Indian consumption comes from 200 cities. And this will further grow as urbanization would jump by 40 to 50 percent. We want to be present in every city which is fostering this growth as connectivity improves over time," said Patu Keswani, Chairman and MD, Lemon Tree Hotels.
"Wherever we have put up a hotel within half an hour of range from an airport, we have seen material difference in uptick of booking," Keswani added.
Consumption of airline seats has grown 13 percent in the last five years. Hotel capacities have grown 16 percent in the last ten years. "In the next four years, tailwinds will lead to a discretionary change in tourism consumption in India. We estimate around 100 millions would be travelling outside India, and through our loyalty programme, we aim to leverage the opportunity, Keshwani explained. India's airlines continue to achieve double-digit growth, with 240 million passengers flying annually—surpassing the total population of most countries worldwide.
Aspirations do not lie in top five to six cities, it resides in Tier II, III, IV and beyond. "We have moved from having 5 to 50 centers in India and next year we might reach 100 branch centers because the aspirational push in India is coming from across the country and not only lies in the top metros," said Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited.
"When you want to deliver financial products you have to be present on the ground. In order to make capital market products or financial products accessible, infrastructure and connectivity of geographies play a crucial role. Inflows of both foreign and domestic capital are dependent on on-ground developments such as factories, offices, etc. And these are further bolstered by seamless connectivity. Wherever there is connectivity there is scope of development," Gupta added.
Indian aviation is realizing the enormous potential of a market of 1.4 billion people as it catalyzes growth in tourism and investment that is critical to India's national development.
The panelists were speaking at the 81st Annual General Meeting (AGM) of the International Air Transport Association (IATA) at Bharat Mandapam in New Delhi. The panel examined the impact of aviation and how it contributes to social and economic development as a force.