NEW DELHI: The Indian aviation industry, now the third-largest aviation market globally, contributes a significant USD 53.6 billion annually to the national economy, accounting for 1.5% of the country’s Gross Domestic Product (GDP). The sector is also a key employment generator, creating approximately 7.7 million jobs both directly and indirectly across the country.
During the opening day of the International Air Transport Association (IATA) annual general meeting on Sunday, Amitabh Khosla, IATA’s country Director for India, Nepal, and Bhutan, said the crucial role aviation plays in the nation’s economic growth. He described the industry as a major driver of employment, economic activity, international trade, investment, and global connectivity.
Khosla highlighted the correlation between a country's air connectivity and competitiveness, productivity, investment levels, tourism, and trade flow. “In 2023, the industry annually generated a USD 53.6 billion contribution to India’s economy, underpinning 7.7 million jobs in the country,” he said.
Tourism, supported by aviation, contributes Rs 27.1 billion to the GDP and employs 5 million people. International tourists add another USD 29.4 billion annually to the economy through local purchases of goods and services. “Overall the travel and tourism sector accounts for 6.5% of the nation’s GDP and 8.9% of total employment in 2023,” Khosla stated.
Khosla also pointed out that India has shown a strong recovery from the COVID-19 pandemic. While the domestic aviation market rebounded more quickly, the international segment has now surpassed pre-pandemic levels. As of December 2024, the international sector stood nearly 20% above its 2019 levels, while domestic operations were over 8% higher. “Such a positive recovery reaffirms the strong demand for international travel and provides a firm foundation for the period ahead,” he said.
The Middle East remained the top international destination for Indian flyers in 2023, with 13.7 million passengers, followed by the Asia Pacific region and Europe.
To meet growing demand, airlines have ramped up flight frequencies and seat capacities. Scheduled flights increased by 77.7%, reaching about 1.3 million in 2024. Most of these were domestic, which surged from 613,000 flights in 2014 to nearly 1.1 million in 2024. Indigo led this expansion, operating 53% of all departing flights from and within India.
Consumers have also benefited from increased competition, which led to a 25% reduction in real airfares in 2023 compared to 2011, Khosla noted.
Currently, India has 116 airports offering commercial scheduled services, with 96 of them providing direct connections and 521 outbound international flights each day. Over the last five years, 103 new international routes have been introduced. There are currently 99 operational airlines in the country.
India has also established itself as the sixth-largest air cargo market in the world, transporting 3.3 million tonnes of air freight in 2023. Khosla added that the country holds significant potential for the development of Sustainable Aviation Fuel (SAF).