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Air Connectivity About RIS Research and Information System for Developing Countries (RIS) is a New Delhi–based autonomous policy research institute that specialises in issues related to international economic development, trade, investment and technology. RIS is envisioned as a forum for fostering effective policy dialogue and capacity-building ASEAN-INDIA among developing countries on global and regional economic issues. AIR CONNECTIVITY The focus of the work programme of RIS is to promote South-South Cooperation and collaborate with developing countries in multilateral negotiations in various ASEAN-INDIA AIR CONNECTIVITY REPORT REPORT forums. RIS is engaged across inter-governmental processes of several regional economic cooperation initiatives. Through its intensive network of think tanks, RIS seeks to strengthen policy coherence on international economic issues and the development partnership canvas. For more information about RIS and its work programme, please visit its website: www.ris.org.in About AIC ASEAN-India Centre (AIC) has been working to strengthen India's strategic partnership with ASEAN in its realisation of the ASEAN Community. AIC at RIS undertakes research, policy advocacy and regular networking activities with relevant public/private agencies, organisations and think-tanks in India and ASEAN countries, with the aim of providing policy inputs, up-to-date information, data resources and sustained interaction, for strengthening ASEAN-India Strategic Partnership. For more information about AIC, please visit its website: http://aic.ris.org.in fodkl'khy ns'kksa dh vuqla/ku ,oa lwpuk iz.kkyh Core IV-B, Fourth Floor, India Habitat Centre Lodhi Road, New Delhi-110 003, India Tel.: +91-11-2468 2177-80, Fax: +91-11-2468 2173-74 E-mail: [email protected] Website: http://www.ris.org.in; http://aic.ris.org.in fodkl'khy ns'kksa dh vuqla/ku ,oa lwpuk iz.kkyh ASEAN-India Air Connectivity Report Copyright © AIC, 2016 Published in May 2016 by: Zone IV B, 4th Floor, India Habitat Centre Lodhi Road, New Delhi 110 003, India Tel.: +91-11-24682177-80; Fax: +91-11-24682173-74 E-mail: [email protected] Website: http://aic.ris.org.in ISBN: 81-7122-117-3 Cover design: Sachin Singhal Contents Foreword by Ambassador Shyam Saran, Chairman, RIS ...................................................v Preface by Prof. Sachin Chaturvedi, Director General, RIS ............................................vii Acknowledgements .......................................................................................................................... ix Abbreviations ........................................................................................................................................x Executive Summary .......................................................................................................................xiii Part I Introduction .....................................................................................................................................1 Why is Air Connectivity so Important?.................................................................................7 Air Connectivity and Regional Integration: Stylised Facts ........................................15 Trade between ASEAN and India: Trends and Compositions .................................23 Routes, Passengers and Cargo Flows between ASEAN and India ..........................39 Airport Infrastructure, Performances and Challenges ...............................................89 Air Service Agreements (ASAs) between India and ASEAN .................................111 Summary and Recommendations .....................................................................................125 References ................................................................................................................................... 131 Appendices ................................................................................................................................. 133 Part II Agenda – Roundtable on ASEAN-India Air Connectivity Study ...........................151 Keynote Address by Ambassador Anil Wadhwa, Secretary (East), Ministry of External Affairs (MEA) ...................................................................................153 Special Address by Ms. Pooja Kapur, Joint Secretary (ASEAN ML), Ministry of External Affairs (MEA) ...................................................................................158 List of Participants ..................................................................................................................162 Summary of the Roundtable ...............................................................................................166 Foreword Amb. Shyam Saran Chairman, RIS Enhancing connectivity between ASEAN and India is the major thrust of India’s Act East Policy. Connectivity in the form of road, rail, maritime, as well as air links is indispensable to achieving increased cooperation in trade, investment and strengthening people-to-people contacts between nations. Better connectivity would lower production costs and increase reliability of supply chain. In this context, air connectivity is an important mode of transportation to carry tourist and business travellers, high-value fragile goods and perishable commodities from one place to another at a shorter time. With implementation of the India-ASEAN Free Trade Agreement in Services market. Air connectivity will play a pivotal role not only in expanding trade and investmentsand Investments, between ASEAN them and but Indiaalso in would strengthening likely to services benefit trade.from anThe extended ongoing negotiations for the ASEAN Single Aviation Market (ASAM), which is the region’s aviation market in Southeast Asia, would create a huge potential for India to integratemajor aviation with ASAM.policy Airgeared connectivity towards is,the therefore, development an important of a unified component and single of India’s connectivity agenda with ASEAN. ASEAN-India Air Connectivity Report, prepared by the ASEAN-India Centre (AIC) at RIS under the guidance of Prof. Prabir De, addresses the issues and challenges concerning the air connectivity between India and ASEAN, especially relating to air cargo that would help to unlock the trade potential of the region by removing constraints and bottlenecks to growth. It also provides a set of recommendations to strengthen air connectivity between India and ASEAN, and enhance economic integration between them. This Report provides important policy recommendations. ASEAN-India Air Connectivity Report is an outcome of a series of ASEAN-India support of the Ministry of External Affairs, Government of India. I am thankful connectivity studies undertaken at the ASEAN-India Centre at RIS with financial v ASEAN-India Air Connectivity Report to Ambassador Preeti Saran, Secretary (East), Ambassador Anil Wadhwa, former Secretary (East) and Ms. Pooja Kapur, Joint Secretary (ASEAN ML) in the Ministry of External Affairs, Government of India for their continuous support to the ASEAN-India Centre. I wish to thank my colleagues at RIS including Dr. V.S. Seshadri, Vice-Chairman and the Director General, Prof. Sachin Chaturvedi, for their constant support and cooperation. I trust that this Report will be a valuable reference for policymakers, academics and practitioners. Shyam Saran vi Preface Prof. Sachin Chaturvedi Director General, RIS Since early nineties RIS has been entrusted with the responsibility to promote and strengthen ASEAN-India cooperation when India was admitted by ASEAN as a Sectoral Dialogue Partner. Prominent initiatives taken by RIS in this direction include launching of the India-ASEAN Eminent Persons’ Lecture Series in 1996. The setting up of the ASEAN-India Centre (AIC) at RIS that way is a continuation of the RIS work programme for deepening ASEAN-India partnership. Though ASEAN-India economic engagements are moving forward in the desired direction, yet there are certain challenges that call for policy interventions. The issue of enhancing air connectivity is one of them. The present publication entitled ASEAN-India Air Connectivity Report, brought out by the AIC at RIS, aims to giving impetus to the process of strengthening air connectivity between ASEAN countries and India. This Report is coming out at a time when India has embarked on policy of “Make in India” and “Skill India” for which stronger air connectivity is essential and has become all the more important in the context of India’s economic integration with Southeast and East Asia. The Report discusses in detail the major issues and challenges related to promoting air connectivity between ASEAN countries and India in the background of issues such as growing demand for air cargo services; facilitating business and leisure tourists India-ASEAN Single Aviation Market; India-ASEAN Free Trade Agreements in Servicesby having and more Investments; direct flights Regional connecting Comprehensive Tier II and EconomicTier II cities Partnership of India; (RCEP); need for a comprehensive ASEAN-India Air Transport Agreement; expanding scope of bilateral air services agreement (BASA); facilitating regional and global value chains; strengthening India’s air links with CLMV countries; establishing an ASEAN-India School of Aviation; greater cooperation in aviation technology, logistics and infrastructure building; WTO Trade Facilitation Agreement (TFA); etc . vii The Report recommends a series of measures to strengthen air connectivity between ASEAN countries and
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