New Delhi, 1st Feb 2025:

At the second full budget of the Modi 3.0 government, Finance minister Nirmala Sitharaman in her eighth consecutive Union Budget in the Parliament addressed key decisions for the aviation sector. This year’s Union Budget holds special focus on agriculture, uplifting rural areas, manufacturing, innovation, etc as the FM mentioned that the Modi government’s budget aims to work on transformative reforms.

The FM announced that under the current aviation budget, as many as 120 new airports will be connected in a span of 10 years under UDAN scheme. Additionally, Bihar will get new greenfield airport at Bihta along with the expansion project of the Patna airport.

UDAN – Regional Connectivity Scheme

While presenting the Union Budget the finance minister said, “UDAN has enabled 1.5 crore middle-class people to meet their aspirations for speedier travel. The scheme has connected 88 airports and operationalized 619 routes. Inspired by that success, a modified UDAN scheme which will be launched to enhance regional connectivity to 120 new destinations and carry 4 crore passengers in the next 10 years and this scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts.”

She also informed that the government will facilitate upgradation of infrastructure and warehousing for air cargo including high value perishable horticulture produce. Cargo screening and customs protocols will also be streamlined and made user-friendly.”

Giving infrastructure fillip to the state of Bihar, the Union Finance Minster proposed that the Greenfield airports will be facilitated in Bihar to meet the future needs of the State. These will be in addition to the expansion of the capacity of Patna airport and a brownfield airport at Bihta.

Vinay Dube, Founder and CEO, Akasa Air said,”The Union Budget 2025 marks a significant step in supporting the sustained growth of India’s aviation sector. We commend the government’s commitment to infrastructure which will make air travel more accessible, thereby boosting tourism and the economy on the whole. Aligned with the vision of Viksit Bharat 2047, this focus on aviation strengthens India’s position as a global hub, ensuring greater mobility for all and contributing to a more connected, inclusive nation. As India’s fastest-growing airline, we applaud the government’s continued efforts to fuel the sector’s growth and make air travel accessible to a greater number of Indians.”

Industry experts opinions on the Union Budget catering to the aviation & aerospace sector alongwith travel trade sector:

Vinay Bagri, Co-Founder & CEO, Niyo

The Union Budget 2025 brings encouraging developments for both startups and international travellers. The five-year extension for startup incorporation eligibility is a strong boost to India’s entrepreneurial ecosystem, providing much needed continuity and support. On the international travel front, while the increase in the Liberalized Remittance Scheme (LRS) limit to ₹10 lakh is a step forward, we were hoping for exemptions on TCS for global travellers which remains a concern. The removal of TCS on education remittances from loans is a positive move, easing the financial strain on students. As a travel banking fintech, we believe these policy changes will impact how Indians engage with the global economy.

Amey Belorkar – Fund Manager – Maharashtra and Aerospace Venture Fund at IDBI Capital Markets & Securities Limited

The Budget has focused on strenthening India’s MSME and Startup ecosystem through enhanced credit access by way of expanded fund-of-funds (FOF) of Rs 10,000 crores as well as a proposal for setting up a Deep Tech FOF. Further the investment limits for MSME classification have been increased by 2.5 times which means that businesses can now invest significantly more while still qualifying as MSMEs. Also startups are benefited with the increase in Incorporation period by 5 years. The allocation of Rs 500 crore for MRO sector and the establishment of a Rs.25,000 crore corpus for shipbuilding shows India’s commitment to promote India’s self-reliance.

Additionally, India is focused to accelerate clean energy to develop at least 100 GW of nuclear power by 2047 and encourage private sector involvement. A dedicated Rs. 20,000 crore R&D initiative for Small Modular Reactors (SMRs) will be launched, with the goal of having at least five indigenously developed SMRs operational by 2033. The Budget also aims to create self reliance in EV and mobile phone battery manufacturing.”

Krishna Rathi, Senior Country Director, India Subcontinent and MEA at Agoda:

Agoda acknowledges and celebrates India’s exciting potential as a top travel destination and is enthusiastic about the tourism plans announced in this year’s Union Budget. The investment in recent years in infrastructure enhancements and destination marketing is undeniably paying off. At Agoda, we see this reflected in a 22% year-on-year increase in inbound accommodation searches to India. With this year’s announced investments in the expansion of the UDAN scheme to connect 120 new destinations, enhanced support for homestays, and the development of top tourist destinations in collaboration with state governments, we’re hopeful that India will be able to sustain this momentum. Especially as this comes on top of continuing positive trends like visa easements and inspirational destination marketing campaigns promoting India’s diverse experiences and attractions.”

Ankit Mehta, CEO, ideaForge:

The Union Budget 2025 reaffirms the government’s commitment to deep tech innovation. The rise in PLI spending for drones and drone components—from INR 33 crore to INR 57 crore within the total outlay of INR 120 crore—reflects the increasing scale of industry participation and adoption. This trend highlights the sector’s growing momentum and the need for sustained support.

However, to fully unlock the potential of this technology, a significantly larger scheme of INR 1,000-2,000 crore over at least five years is essential. Additionally, the INR 20,000 crore allocation for private-sector-led R&D and the launch of the National Geospatial Mission will accelerate advancements in autonomous systems, precision mapping, and next-generation infrastructure planning.
Together, these initiatives position India as a global leader in drone and geospatial intelligence, driving innovation and self-reliance in this critical sector.”

Kush Kapoor, CEO, Roseate Hotels & Resorts:

“The Union Budget 2025 presents a forward-thinking approach that is bound to benefit the hospitality and tourism sector significantly. The announcement of visa waivers for select foreign tourist groups will undoubtedly make India a more accessible and attractive destination for global travelers. The provision of Mudra loans to support homestays is a commendable step toward boosting grassroots tourism and encouraging local entrepreneurship. These measures will not only enhance travel experiences but also strengthen community-driven hospitality ventures.

Moreover, the tax exemption for upto Rs 12 lakh income, and the resulting relief for a large section of the population are game changers for the industry. With higher disposable incomes, people are likely to increase their spending on travel, dining, and leisure experiences. This boost in discretionary spending will drive demand across hotels, restaurants, and other tourism-related businesses. The government’s thoughtful initiatives will contribute to bolstering consumer confidence and ultimately play a significant role in the growth of the hospitality sector and the nation’s economy as a whole.”

Munjal Shah, Managing Director of Paras Defence & Space Technologies:

The Union Budget 2025-26 reinforces India’s commitment to strengthening its defence and aerospace capabilities, with a significant allocation of Rs.4,91,732 crore. The ₹20,000 crore push for private sector-led R&D is a defining moment, paving the way for cutting-edge advancements in optronics, AI-driven surveillance, defence electronics, and space technologies—all key focus areas for Paras Defence.

The emphasis on geospatial intelligence, AI research, and next-gen ISR (Intelligence, Surveillance, and Reconnaissance) systems signals a clear shift toward high-tech defence solutions. Additionally, the government’s commitment to the ‘Make in India’ initiative and reduced import dependency presents a strong opportunity for indigenous companies to lead the next wave of innovation in electro-optics, aerospace, and EMP protection solutions.

With ₹20,000 crore dedicated to private sector-driven R&D, this budget sets the stage for deeper industry-academia collaboration, fostering indigenous advancements in high-precision surveillance, autonomous defence systems, and space-based intelligence solutions.

With India’s defence modernization in full swing, this budget creates the right environment for industry-driven advancements. At Paras Defence, we are excited to leverage these opportunities and continue delivering world-class, homegrown solutions that will shape the future of India’s defence and space sectors.

Tapan Ray, MD and Group CEO, GIFT City:

The Union Budget 2025 reinforces the government’s commitment to making GIFT City IFSC a global financial hub. The proposed tax incentives and regulatory simplifications will attract global investors, fund managers, and businesses, strengthening India’s financial ecosystem. With these measures, GIFT City is set to become a competitive and business-friendly destination on the global financial map. It will play a key role in driving India’s growth in the international financial services sector.

Ambika Saxena, CEO, TWH Hospitality:

This year, the government has presented a well-balanced and growth-oriented budget, specifically supporting the tourism and hospitality sectors. The modified Udaan scheme will open doors for the hospitality sector by bringing new tourist destinations into the spotlight. Hotels, resorts, and homestays in unexplored regions will see a surge in demand, encouraging further investment and development. With the government’s push for connectivity and including new 120 destinations, we expect a stronger pipeline in the hospitality sector, catering to both business and leisure travellers in emerging tourism hotspots.

Yogesh Mudras, Managing Director of Informa Markets in India:

The Union Budget 2025 presented a progressive roadmap that prioritises infrastructure, economic growth, and regional connectivity. The government’s continued emphasis on regional development and tourism-friendly policies will have a far-reaching impact on multiple sectors, including travel and tourism. The modified Udaan scheme, in particular, is a landmark initiative that will strengthen India’s position as a global tourism hub. The scheme has already benefited 1.5 crore middle-class travellers, and the expansion of the scheme to include 120 new destinations is a game-changer for regional connectivity. With increased accessibility, we anticipate a surge in domestic tourism and business travel, providing a major boost to the tourism industry.