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New Delhi: The Union Budget 2025-26, presented by Finance Minister Smt. Nirmala Sitharaman on Saturday, outlines key developments for India’s aviation sector, focusing on regional connectivity, airport expansion, and air cargo infrastructure.
Funding and Expansion Plans
The Ministry of Civil Aviation has been allocated ₹2,400.31 crore for the year, a slight reduction from ₹2,658.68 crore in the previous budget. The UDAN (Ude Desh Ka Aam Nagrik) scheme, aimed at making air travel affordable and accessible, will receive ₹540 crore to further enhance regional connectivity.
India’s domestic aviation market continues to grow, with annual passenger traffic crossing 350 million, making it the third-largest aviation market globally. Over the past decade, the number of airports has more than doubled to 159, and the government now plans to develop 50 more airports over the next five years. In Bihar, new Greenfield airports will be developed alongside the expansion of Patna airport and the establishment of a brownfield airport at Bihta.

The allocation for Customs Cost Recovery (CCR) charges to the Airport Authority of India (AAI) and AAI Cargo Logistics and Allied Services Company Ltd (AAICLAS) for airports in tier II and III cities has increased to ₹142.75 crore, up from ₹124.17 crore in the previous year.
Strengthening Regional Connectivity
The UDAN scheme which was introduced in 2017 has played a significant role in connecting smaller cities, with 619 routes operational and 88 airports linked. A revamped version of the scheme will introduce 120 new destinations, focusing on helipads and smaller airports in remote and hilly regions, including the North East. So far, 1.5 crore passengers have benefited from UDAN, with plans to expand this to 4 crore more in the next decade.
Boosting Air Cargo Infrastructure

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India’s air cargo sector is growing at over 10% annually, with airport cargo handling capacity reaching 8.0 million MT in FY24. The Budget highlights a focus on air cargo warehousing, particularly for perishable goods, to boost exports and domestic trade. Additionally, efforts are underway to streamline cargo screening and customs processes to improve efficiency and ease of doing business.
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