India Aviation Ministry Plans to Invest $8.6 Billion in 5 Years

India, the second-fastest growing major economy, plans to invest 400 billion rupees ($8.6 billion) in the aviation industry during the next five years, Minister Praful Patel said.

“We are in the process of either upgrading or setting up new airports across the country,” Patel, 53, said in an interview in New York yesterday.

Economic growth and rising incomes have boosted air travel in the world’s second-most populous nation. India’s airline passenger numbers may climb to a record 50 million this year from 44 million last year, Boeing Co. forecast last month. Patel expects the industry to grow at least 20 percent over the next five years.

The government has already spent 400 billion rupees in the last few years to upgrade and build new airports in cities including Hyderabad and Bangalore and in the capital, New Delhi.

The nation has 92 airports compared with 45 in 2004, Patel said.

“The government is also investing in runways and navigation systems,” he added.

The Aviation Ministry has recommended that overseas airlines be allowed to own as much as 25 percent of domestic carriers, he said.

“This is our proposal but it’s a larger process of decision making within government,” he said. The government currently doesn’t allow overseas carriers to own stakes in local services.

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

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