There were over 400 airports and airstrips in the country. However, only one-fourth of these were operational. Until 2013, the Airport Authority of India was the sole player in the development of the airports. Economic liberalization in the private sector opened this up since. The government provided a 100 percent tax exemption for a period of ten years for airport projects. Also, under the automatic route, 100 percent and 79 percent FDI was allowed for greenfield and brownfield projects respectively. Further, several unserved and underserved airports across the country were identified and operationalized under the regional connectivity scheme.
With an aim to provide affordable air connectivity for the masses and boost growth of this sector, the Ministry of Civil Aviation launched the Regional Connectivity Scheme- Ude Desh ka Aam Nagrik (RCS-UDAN). This multi-billion rupee scheme provided monetary support for the development of infrastructure across tier-II and tier-III cities. This scheme not only covered airplanes, but helicopters and seaplanes. Several routes were planned by keeping the tourism sector in focus. In October 2020, the first seaplane service was launched in the country. With airports and helipads, the country now had water aerodromes as well. SpiceJet bagged the contract for eight seaplane routes across the country.
Within six years of its commencement, SpiceJet started to fly internationally. SpiceJet was one of the leading players in both the domestic and international markets. After the closure of Jet Airways in 2019, it was the second largest market player, after IndiGo, in the domestic segment. It was also among the top Indian airlines in the international segment. There was a continuous rise in the market share of the company in the international segment. The Indira Gandhi International Airport in Delhi had the highest footfalls, and it handled the most international passengers in the country as well. Since 2016, the demand for aviation in the country showed robust growth in both the international and domestic sectors. This was matched by the growing capacity. However, the demand outpaced supply capacity and has resulted in high capacity utilization.
Intending to develop the maintenance, repair, and overhaul (MRO) sector the government reduced the goods and service tax on this sector from 18 percent to five percent in 2020. To strengthen the aviation sector, many steps have been taken. However, the government had failed time and again to sell the debt-ridden Air India. More than half a trillion Indian rupees have been invested in Air India, to keep it afloat. To achieve holistic growth, several factors such as fluctuating prices and taxes on air turbine fuel, fluctuating currency, and availability of skilled workforce, need to be tackled. The shutdown of the aviation industry due to the COVID-19 pandemic has brought all together a new set of challenges that need to be swiftly dealt with.