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FDI in Aviation

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 market 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. The domestic aviation market of India too has been growing rapidly, and is estimated by IATA (International Air Transport Association) to emerge as the third biggest domestic aviation sector in the world by the year 2020, after USA and China. Hence, on the whole, fdi in aviation in india, is going to be hugely popular and preferred by foreign aviation companies and investors, because of being very profitable and secured.

Pros and Cons of FDI in Aviation sector

Greater fdi in aviation is reckoned by experts to offer certain inevitable disadvantages to the Indian aviation companies and foreign enthusiastic investors in the aviation sector of India, and also to Indian professionals and other people, besides some essential and outstanding advantages. In the following are given pros and cons of fdi in aviation sector in india.

Foreign investors in the aviation sector of India will find extensive and ever-growing domestic and international market, for tremendous profits. Air travel for both domestic and international aviation will be cheaper and more lavish. There will be greater income to the aviation sector of India by domestic and international tourism, and other related sectors of Indian economy. Better will be chances for employment in the aviation sector of India.

However, there are certain inherent uncertainties and disadvantages in the fdi in the aviation sector of India, to both foreign companies and investors and the Indian aviation companies and investors in the short- and long- terms. The business competition in the Indian aviation market will be more and intense, and will favor the big players. The presence of greater number of aviation companies will reduce the overall profitability. Cost of employment for highly qualified and talented aviation professionals will rise regularly. Indian aviation companies will need to become more efficient, circumspect, and professional.