Indian travellers can benefit from UAE-India air services liberalisation

The report said policymakers in New Delhi and Abu Dhabi should ‘seize this moment’ to implement a phased liberalisation roadmap.

The recommendation is to adopt a strategic, phased approach to open up the skies, and do so with ‘urgency’ ensuring that both countries stay ahead of demand, capitalise on mutual opportunities, and jointly secure their position as global aviation leaders.

To capture these gains, the report suggests a phased liberalisation of India–UAE air services.

Key policy measures include:

Phased Capacity Expansion: Given India’s robust growth trajectory, UAE-India flight capacity can be doubled over five years, with annually phased liberalisation of 20 percent. This steady expansion will meet rising demand while avoiding market shocks, leading to a 20-percent reduction in airfares. A controlled pace prevents sudden overcapacity and guards against traffic diversion to third-country hubs, ensuring sustainable growth for airlines in both countries.  

Strengthen Hubs and Regional Connectivity:

Invest in and enhance major Indian airports (Delhi, Mumbai, Bengaluru) as efficient international hubs in partnership with UAE carriers. Synchronise flight schedules to improve connections. Simultaneously, phase in UAE airline access to tier-2 and tier-3 Indian cities in a calibrated manner. This approach boosts connectivity for smaller cities while allowing Indian domestic carriers to partner (through codeshare/interlining) for last-mile connectivity, so regional airports grow alongside major hubs.

Liberalising air services

The report added liberalising air services would generate substantial welfare gains for Indian travellers. A phased 5-percent annual increase in bilateral seat capacity is projected to add over US$152 million in consumer surplus by 2028 (directly adding to Indian travellers’ savings). A more ambitious doubling of capacity over five years could yield an economic benefit exceeding US$1.05 billion to Indian consumers. Thus, phased liberalisation up to 100 percent can generate savings for Indian consumers exceeding US$1.05 billion.