October 30, 2013
Mr. Anthony Foxx, Secretary, US Department of Transportation, Ms. Leocadia Zak, Director, US Trade and Development Agency, Ms. Nirupama Rao, Ambassador of India to US, Mr. K.N. Shrivastava, Secretary, Civil Aviation, Government of India, esteemed guests, distinguished delegates, Ladies & Gentlemen,
It is a moment of pride for me to be here today amongst this august gathering, a confluence of best minds in the civil aviation industry, business and policy makers from the US and India on the occasion of launch of the US-India Aviation Summit. I would like to thank the US Trade and Development Agency alongwith its partners to have worked in tandem with the Government of India in organizing this prestigious event. I am certain this event will set the tone for a close collaboration between India & the USA, and explore the latent potentialities in the aviation markets of both the countries. The summit will also bring the realization of inter-dependencies between both the countries incorporating shared agenda which will lead to growing areas of synergy between the key players from both the sides.
India US bilateral relations have developed into a global strategic partnership, based on increasing convergence of interests on bilateral, regional and global issues. The two countries share common values and are strategically moving towards closer ties which is reaffirmed by commitments during high level visits from both sides and reflected through rapidly expanding trade. Nothing can best describe the India-US relationship than the quotes from President Obama and Prime Minister Singh during the Indian Prime Minister’s visit to the USA last month. President Obama said, “There is a natural convergence between the United States and India. What we have been able to do during the time that I have been president, is to try to make sure that our government-to-government cooperation matches the great affection and affinity that exists between the Indian and American peoples." Our Prime Minister Dr. Manmohan Singh responded in the same spirit. To quote him, “India and America are working together to give our cooperation a new sense of commitment, widening and deepening it in diverse directions. We are cooperating in expanding the frontiers of trade, investment in technology.” The strong partnership between India and the US is also evident from the fact that total bilateral trade in goods between the two countries touched US $ 62.8 billion in 2012, the aircraft, spacecraft and their parts being one of the major items of export from US to India.
Rapidly expanding air transport network and opening up of the airport infrastructure to private sector participation have fuelled the growth of the air traffic in India. India is currently the 9th largest aviation market handling 121 million domestic and 41 million international passengers with more than 85 international airlines operating to India and 5 Indian carriers connecting over 40 countries. The Indian airport system is poised to handle 336 million domestic and 85 million international passengers by 2020, making India the third largest aviation market.
Moreover, it is estimated that commercial fleet size is expected to reach 1000 aircraft worth US$ 45 billion from 400 today by 2020. Besides, Indian government has envisaged investment of US $12.1 billion in the airports sector during the 12th Plan period, of which US $ 9.3 billion is expected to come from the private sector for construction of new airports, expansion, and modernization of existing airports and development of low cost airports.
Over the past decade, civil aviation in India has been scripting a major success story. The Government in tune with general policy of liberalization has brought in positive initiatives to attract foreign direct investment and rope in private investments that have helped in releasing the latent potential of this sector and make it a key player in the nation’s economic growth. One of the most important initiatives in this direction is to allow 49% Foreign Direct Investment by foreign airlines in Indian carriers. The results of this policy are already visible as two new scheduled airlines: Air Asia and Tata SIA are going to start their operations in near future. This is in addition to the FDI of US$ 350 million by Etihad in to Jet Airways. India has also adopted liberal policies regarding bilateral air services agreement, partnerships and code-sharing. To facilitate the growth of MRO Business and to make it competitive, the Government of India have also announced several concessions.
The development of GPS Aided Navigation System ‘GAGAN’ developed by Airports Authority of India with the support of Indian Space Research Organisation is another significant step which would bring India on the threshold of redefining navigation in the region from land based to satellite based system. India is the fourth country in the world after USA, Japan and Europe to have such navigation system which will facilitate aircraft landing in tough weather & terrain. This will also help in reducing flying time and fuel consumption by providing straight navigation and thus reducing carbon emission.
We have also allowed Flexi Use of Airspace by civil and military users, which permits them to efficiently and effectively utilize the available airspace on sharing basis. It is expected that there will be a reduction of carbon emissions by about 7 million kg per annum by direct routing between 7 major city pairs only because of flexible usage of airspace.
Another important move that has accelerated the modernization and development process in civil aviation sector is the privatization of five major airports including Delhi and Mumbai airports under PPP mode and also development of Greenfield airports which envisages synergy between public and private sector. Recently, we have also initiated the process of privatizing another six airports through public private partnership, which include Chennai, Kolkata, Lucknow, Ahmedabad, Jaipur and Guwahati airports.
Franklin Roosevelt once said “The test of our progress is not whether we add more to the abundance of those have much; it is whether we provide enough for those who have too little”. In an endeavor to make the growth of the sector equitable and inclusive, Government of India has taken significant measures for providing affordable air connectivity to remote and interior areas of the country and Tier-II & III cities of India. The decision of modernization and development of 50 new airports in Tier-II and III cities in India is a significant step in this direction.
Friends, let me share with you a quote great visionary Mahatma Gandhi, “The earth, the air, the land and the water are not an inheritance from our forefathers but loan from our children. So we have to handover to them at least as they were handed over to us”. To take care of environment, we have taken number of steps to reduce carbon emission in the civil aviation sector. Airports Authority of India has led the partnership of neighboring countries in Arabian Sea Indian Ocean Region called “INSPIRE” to form a User Preferred Routes Zone. The User Preferred Routes allow flights to use favorable wind and weather conditions resulting in to saving of 8000 tonnes of carbon emission per year. Besides, Director General of Civil Aviation has also launched number of proactive initiatives in order to minimize adverse impact of aviation on environment. India has released the Carbon Footprint Report for 2012 for civil aviation sector in recently concluded ICAO General Assembly meeting in Montreal, which shows that the Carbon Footprint of Indian aviation is significantly low.
Considering the growth prospects of air traffic, potential for large scale acquisition of aircrafts by the airlines and substantial investment projections, Indian civil aviation market offers tremendous opportunities for US industries to invest in India. Furthermore, the gap between potential and current air travel penetration which is currently 0.04 airstrips per capita per annum, highlights the huge potential for the air traffic growth in India, considering a relatively higher trajectory of economic growth coupled with necessary Government support.
I hope the Summit will build on the results of previous Summits with the goal of increasing collaboration between both the countries. I understand that the key topics that will be covered in the deliberations include new air traffic management technologies and procedures, airport infrastructure development, financing & tariff, aviation safety and security, aircraft environmental issues and environmental sustainability at airports and general aviation development, among other subjects that are critical to an expanding aviation infrastructure. The Summit will also provide valuable network opportunities for US and India to discuss challenges facing the civil aviation sector in both the countries. In line with the quote of Henry Ford, “Coming together is a beginning; keeping together is progress; working together is success”, I expect that the opportunities identified during the deliberations will be taken to their logical conclusions by working together in future.
Let me conclude by saying that aviation scenario in India is fast changing and poised for breaking boundaries and scaling new heights. With ever increasing scope for participation by private sector, we expect significant development in the years ahead. Friends, India is a land of emerging opportunities. Let’s build partnerships to draw on these opportunities and drive the engine of India’s growth.
I would like to once again thank the USTDA and other partners for organizing this prestigious Summit.
Thank you all.