India's aviation industry has been witnessing a boom due to exponential growth in the domestic passenger carriage, cargo movement and international air traffic. India has jumped to 9th position in the world aviation market in 2007 from 12th in 2006. The airlines business is growing at 27 per cent per annum in India. During 2007, domestic airline passenger traffic has shown a growth of 32.51 per cent. Moreover, India's new international status as IT and manufacturing hub has led to the growth of international air traffic.

The aviation sector can be subdivided into the airport and airline industry. Sound airport infrastructure is a vital component of the overall transportation network and contributes directly to a country's international competitiveness. It also encourages flow of foreign capital into the economy. The FDI limits in civil aviation sector includes upto 49% on automatic route and upto 100% for NRI in Air Transport Services subject to no direct or indirect participation by foreign airlines. Also, includes FDI upto 100% for setting up Greenfield airport projects.

As far as the airlines are concerned, there are a number of companies, both public and private sector, which are providing passenger transport and cargo handling services in the country. In the public sector, there are mainly Air India, Air India Charters Limited and Alliance Air. In the private sector, there are 8 scheduled airlines (passenger), namely, Jet Airways, Sahara Airlines, Deccan Aviation, Go Airways, Spice Jet, Kingfisher Airlines, Paramount Airways and Inter Globe Aviation Ltd. (Indigo). There is also a cargo private scheduled airline called as the Blue Dart Aviation Ltd. Besides, there are 86 companies, holding non-scheduled air transport operators permit.

Further, in order to increase international connectivity and facilitate foreign travel for passengers, India has entered into 'Air Service Agreements (ASA)' with around 103 countries. These bilateral agreements provide the basic legal framework for operation of air services between the two contracting parties. The number of flights each country can operate and the destinations that could be served are also specified in these agreements.

The Ministry of Civil Aviation is the nodal authority responsible for the formulation of national policies and programmes for development and regulation of the civil aviation industry in the country. Its functions also extend to overseeing airport facilities, air traffic services and carriage of passengers and goods by air. Two separate organizations under the Ministry monitor and regulate the sector:-

1. Directorate General of Civil Aviation (DGCA) is the regulatory body responsible for regulation of air transport services to/from/within India and for the enforcement of civil air regulations, air safety and airworthiness standards.  The regulations are in the form of the Aircraft Act,1934; the Aircraft Rules,1937; the Civil Aviation Requirements; and the Aeronautical Information Circulars.  Its other functions include:-
   
   
• Registration of civil aircraft;
  
  
• Formulation of standards of airworthiness for civil aircraft registered in India and grant of certificates to such aircrafts;
  
  
• Licensing of pilots, aircraft maintenance engineers; flight engineers; and air traffic controllers;
  
  
• Maintaining a check on the proficiency of flight crew, and also of other operational personnel such as flight dispatchers and cabin crew;
  
  
• Conducting investigation into accidents/incidents and taking accident prevention measures;
  
  
• Carrying out amendments to the Aircraft Act, the Aircraft rules and the Civil Aviation requirements for complying with the requirements of International Civil Aviation Organisation (ICAO);
  
  
• Granting approval to aircraft maintenance, repair and manufacturing organizations;
  
  
• Rendering advice to the Government on matters relating to air transport including bilateral air services agreements; on ICAO matters and on all technical matters relating to civil aviation; etc.



2. Bureau of Civil Aviation Security (BCAS) is the regulator for civil aviation security in the country. It's main responsibility is to lay down standards and measures in respect of security of civil flights at International and domestic airports in India. This also includes planning and co-ordination of all aviation security related activities, operational emergencies and crisis management. It is the "Appropriate authority" to ensure development, maintenance, updation and implementation of 'National Aviation Security Programme' for India and fulfill all international obligations in this context. The bureau has four 'Bomb Detection and Disposal Squads (BDDS)' positioned at the international airports of Delhi, Mumbai, Kolkata and Chennai with latest sophisticated equipment like Robot, Real time Viewing System (RTVS), Electronic Stethoscope, Explosive Detector, etc.

The Ministry of Civil Aviation has the following public sector undertakings/companies/autonomous bodies under its administrative control:-

1. National Aviation Company of India Limited (NACIL) :- is a company incorporated under the Companies Act, 1956 and has the functions and responsibilities of providing safe, efficient, adequate, economical and properly coordinated international air transport services. It has been set up after the merger of Air India and Indian Airlines in 2007. This merger aims to create the largest airline in India. The name of the new airline is Air India and its logo is Maharaja. NACIL is carrying its operations under two operating permits, viz., NACIL-A and NACIL-I. It has following wholly owned subsidiaries, namely, Hotel Corporation of India Limited, Air India Charters Limited (AICL), Air India Engineering Services Ltd (AIESL); Air India Air Transport Services Limited (AIATSL); and Alliance Air.
   
   
2. Airports Authority of India (AAI) :- was constituted in 1995 for creating, upgrading, maintaining and managing civil aviation infrastructure, both on the ground and air space of the country. It aims at providing world class airport services for efficient operation of air transport in the country. It manages 127 airports, which include 16 international airports, 8 customs and 79 domestic airports and 24 civil enclaves at defence airfields. It controls the entire Indian airspace of 2.8 million square nautical miles.
   
   
3. Pawan Hans Helicopters Limited (PHHL) :- was established in 1985 as the country's national helicopter company for providing helicopter support services to the Oil Sector; operate scheduled/non-scheduled helicopter services in inaccessible areas and difficult terrains; as well as provide charters for promotion of travel and tourism. It has a well balanced fleet of 35 helicopters consisting of Bell 206L4, Bell 407, Dauphin SA 365N & AS 365N3 and Mi-172, which are most appropriate for multi-farious jobs. It is the only aviation company in India being awarded ISO 9001:2000 certification for its entire gamut of activities.
   
   
4. Indira Gandhi Rashtriya Uran Akademi (IGRUA) :- was established by the Government with the objective of improving the flying training standards in civil aviation and to impart line oriented flying training of international standards. It has been set up at Fursatganj in Rai Bareilly District of Uttar Pradesh. It is equipped with modern and sophisticated trainer aircraft, flight simulators, computer based training system, runway with modern navigational and landing aids and its own airspace. It is manned by highly qualified flying and ground instructors, with long experience in the field of aviation and flying training.

With liberalisation of the Indian economy and its global integration, continuous upgradation and modernisation of the aviation sector has become critically important. Accordingly, the current policy focus of the Government is on modernisation of the existing airports as well as the construction of new ones. For instance, the international airports in Delhi and Mumbai are being restructured through public-private partnership. Two greenfield airport projects at Bangalore and Hyderabad are being implemented on Build Own Operate Transfer (BOOT) basis. The AAI has decided to develop and modernise 35 non-metro airports to world class standards. Also, the bilateral arrangements are being strengthened for ensuring better international connectivity.

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