FDI in civil aviation: Need and impact analysis

All-round economic development and prosperity in the developed and fast-developing countries in all around the world, have now made the aviation sector rather large, sophisticated, and open to foreign investors, in most of these countries. Both domestic and international air travels and tourism have now much more increased and enriched, in most of such countries. USA, China, India, Brazil, etc., are some of these countries. In this article we will especially deal with the aviation sector of India. Presently, the aviation market of India is the ninth biggest aviation market in the whole world, and has been growing fast with a rate of over 15% every year during recent years. As per a recent report by RNCOS, the aviation sector of India is going to rank among the top five largest aviation markets in the entire world by the year 2020. Recent liberalization on the rules of foreign investment in the aviation sector of India by DIPP (Department of Industrial Policy and Promotion) and the Government of India is expected to facilitate greater and faster FDI in aviation sector in India, in the near forthcoming years. A growing middle class supplemented with rise in disposable incomes, change in lifestyles and a globalize economy, all act as drivers that project a huge potential for the industry. Besides, airport infrastructure would require an investment of about Rs.67, 500 crore during the 12th Plan of which around Rs. 50,000 crore is likely to be contributed by the private sector. This study examines the need and impact of Foreign Direct Investment on Indian aviation sector.