Working Paper: 517

Indian Civil Aviation Industry: Analysing
the Trend and Impact of FDI Inflow

Priyanka Saharia
Krishna Rajr

 

Abstract

FDI is the major source of external financing to developing countries and it plays a major role in economic growth. Attracting FDI with flexible policies has therefore become a major task in emerging markets. FDI brings large capital inflows across the industries. In this study, we examine the trend and pattern of FDI inflow to the Indian civil aviation industry. The period of the study is from 2008 to 2017. Data is taken from secondary sources for all the selected variables. Selected variables of our study are FDI inflow to the air transportation industry, employment of airlines, and output of the industry. Statistical tools such as CAGR, average annual growth rate, ANOVA, Pearson's correlation coefficient and simple linear regression have been applied for analysis. The findings of our study are that FDI alone cannot work as a game-changer for the Indian civil aviation industry. Relaxing the norms of FDI policy is not always helping to bring more inflow to the industry. Indian policymakers should focus more on the financial health of the industry.

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