Sunil Tuli, president of the Asia Pacific Travel Retail Association (APTRA) and group chief executive of King Power Group (Hong Kong), reflects on the dramatic rise of Indian aviation as a priority market for travel retail in India and beyond.
The world’s fastest-growing major economy has an aviation sector that is battling to keep pace with the demands of India’s rising middle class and the world’s largest Gen Z population.
With 40,000 new passports issued every day and plans for up to 200 new or expanded airports, India’s aviation sector is on a remarkable growth path.
Prime Minister Modi’s government has set its ambition for India to become a high-income, developed economy by 2047 with a GDP forecast of up to $35 trillion, potentially overtaking the US economy in GDP.
While the targeted focus on 2047, the centenary year of India’s independence may seem a little contrived, the progress seen over the past few years demonstrates that India is certainly in the fast lane, delivering the world’s fastest-growing major economy (UN data) and the potential to become the world’s largest economy.
With GDP growth rates of between 7.2% and 8.4% over the past four years, India’s economy is about to pass the $4 trillion per year mark, making it the world’s fifth-largest economy.
It is set to overtake Japan later this year and, if it maintains its growth path, it will overtake third-placed Germany in 2027, and PwC projections suggest its GDP could even exceed that of the United States by 2060.
India’s population, reaching 1.47 billion this year, has overtaken China’s and, alongside a rapidly growing middle class, its Gen Z population is the foundation for further long-term growth, creating a remarkably powerful and appealing consumer target base for everyone from luxury brands to airlines and airports.
With a rising economy comes a surge in demand for air travel from Indian consumers keen to travel the world.
Figures from the Airports Authority of India show that the number of operational airports in the country has more than doubled from 74 in 2014 to 157 in 2024, and the government claims that this could increase to almost 400 by 2047.
A forecast by Indian aviation consultancy YCP Auctus, presented at the APTRA India Conference 2025, suggests a lower figure of around 288, but still an extraordinary scale of development.
India’s Public-Private Partnership (PPP) model is further expanding the number of new airports and airport expansions, with over a dozen currently operating this model, and the Ministry of Civil Aviation is developing PPP modalities for the privatisation of 25 airports under the National Monetization Pipeline plan.
The Indian government’s long-term strategic planning programme is a comprehensive, joined-up approach that aims to develop the country’s transport infrastructure by recognising the interdependence of air, road, rail and water transport infrastructure.
Aviation is a key priority and is founded on the UDAN policy, meaning “Let the common citizen of the country fly”, rapidly expanding domestic air travel accessibility to the wider population.
Building on the successful expansion of India’s major airports, this policy has significantly increased connectivity to smaller cities (Tier 2 and 3) and remote areas, making flying an everyday convenience accessible to a much larger proportion of India’s surging population.
The ambition to provide financially viable regional flight routes with capped airfares is inevitably complex in its influence on the market, but these routes aim to connect over 100 smaller airports in towns to India’s major cities.
This also includes seaplanes and helicopter services. Similarly, the National Air Cargo Policy has aided the development and expansion of the country’s cargo operations, strengthening India’s position as a logistics powerhouse and, linking with the huge focus placed on the technology sector and education – especially in expanding the female workforce – is facilitating the rapid growth of e-commerce.
One remarkable example of the success of the strategy is the fact that the comprehensive planning and new thinking behind India’s growth of its aviation system has resulted in 15% of India’s pilots being female, far above the global average of around 5%.
Government initiatives like UDAN and regional airport privatisation are unlocking new markets, with non-metro airports now accounting for nearly 40% of total passenger traffic.
Outbound travel is also surging, with international departures expected to reach 52 million by 2029, positioning India as the fastest-growing market in South Asia.
The expansion is unlocking new market access and bringing emerging traveller segments into the market and influencing retail trends from Dubai to Denpasar.
While India’s growth is clearly impressive, it is rising from a relatively low base and, in everything from earnings per capita to annual passenger numbers and flights per capita, the country still has far to go to overtake China, for example, but it is a huge country with an increasingly affluent,young population that prioritises international travel and discovery.
INDIA’S AIRPORTS – TRANSFORMING CAPACITY AND THE PASSENGER EXPERIENCE
Central to the country’s aviation focus is the positioning of India’s major airports as hubs connecting the East and the West.
The international airport experience has been transformed in India, led by stunning locations such as Delhi Indira Gandhi International Airport, where operator Delhi International Airport Limited (DIAL) has developed what it describes as ‘a bigger, better, smarter, and future-ready’ airport by blending a capacity of 100 million per annum (with the potential to rise to 140 million) with quality in its ASQ award-winning passenger experience.
The airport has a continuing programme of major developments planned for the next decade to strengthen its role as India’s ‘flagship hub’.
Similarly, Bengaluru’s Kempegowda International Airport has created an even more expansive transformation, setting a global benchmark with new levels of customer service in the remarkable T2 – the ‘terminal in a garden’ – that shares a stunning celebration of the city’s culture, heritage and people.
Major investment developments at Mumbai, Chennai, Bengaluru, Kolkata, and Hyderabad are also strengthening India’s ambition to be a competitive hub to the GCC.
Leading the way for infrastructure essential to achieve India’s growth ambition is Navi Mumbai, the largest of seven major new population centre developments, supported by a new airport, Navi Mumbai International Airport, that will start operating commercial flights in the next few months following its official inauguration in June.
With an initial capacity of 20 million passengers, it will expand to 50 million by mid-2029 following the addition of another terminal and runway. Subsequent planned phases will reach an eventual goal of 90 million passengers per annum by 2036.
Jewar Airport, Noida, with six runways planned, is envisaged to become India’s largest airport and, though delayed, the first phase is scheduled to open soon and will help ease the pressures on capacity at Delhi Indira Gandhi International Airport.
AIRLINE GROWTH
In tandem with the country’s transport policy, India’s airlines are leading the global industry in aircraft orders to utilise those airports, collectively placing orders for approximately 1,700 aircraft to be delivered by 2030.
Last December, Air India augmented its existing mandate of 470 planes by an additional 100, reflecting its confidence in the long-term market.
With new airports and new aircraft come new travellers – including an anticipated year-on-year growth rate of 5-6% in passenger traffic.
NON-AERONAUTICAL REVENUE OPPORTUNITIES
With those 40,000 new passports expanding the potential travel market every single day, Indians are passionate about international travel, and this desire for new experiences brings them right to travel retail’s shop window.
India’s middle classes have a passion – and the wallet – to travel the world. Consumer spending abroad has reached record levels, and the good news for the aviation and travel retail sectors is that their spending priority is foreign travel, increasing from 37% of spend in 2020 to 53.6% in 2024, a rise of almost 25% year-on-year to more than $17 billion in 2024.
The dynamic landscape of travel retail in India is undergoing a significant transformation. With Arrivals stores accounting for approximately 80% of travel retail income generation in the country, the product assortment is rapidly expanding beyond traditional categories such as spirits and tobacco.
Beauty is emerging as a strong contender for the leading category, while confectionery, wellness, toys and tech are steadily gaining retail prominence at major airports.
Indian travellers are increasingly drawn to luxury brands that offer personalisation, immersive experiences and contemporary cultural relevance. To meet these evolving consumer expectations, retailers are elevating their offerings, ensuring they stand out from other retail channels to deliver a differentiated shopping experience.
EVOLVING CONSUMER BEHAVIOUR
- Rising incomes and aspirations are reshaping travel and retail consumption patterns in India.
- Gen Z and Millennials are key influencers, prioritising experiential and ethical consumption.
- The affluent class is expected to double, driving demand for luxury and discretionary spending.
- Consumers are shifting from price-driven to brand-conscious and experience-oriented purchasing behaviours.
- Digital convenience and sustainability are becoming essential for engaging modern travellers.
India’s Gen Z, already numbering 380 million – surpassing the entire population of the USA – is rapidly gaining influence.
By 2035, this demographic is projected to become the largest of its kind globally and is expected to drive 50% of consumer spending decisions in India.
This is a perfect expression of the new India. A new mindset among its middle-class consumers and a signal of theirdetermination to not only enjoy new travel and consumption experiences but also to celebrate an exciting, more
global citizenship.
Among India’s new middle class, there’s surging interest in brands, especially international icons. Just as those middle-class consumers are fuelling India’s economic rise, so too will they play a lead role in driving the future success of India’s aviation sector.
MORE ABOUT APTRA
APTRA (www.aptra.asia) represents the travel retail industry across over 45 markets in Asia Pacific with advocacy and regulatory services, networking, knowledge and research.
The next APTRA India conference is scheduled for Q1 2026 and the APTRA North Asia Forum in Hong Kong will take place on December 3-5, 2025.