A decade after India’s regional aviation revolution began, the government has doubled down – not just with more money, but with a fundamentally different vision of what “connected” actually means.
When the Government of India announced UDAN 2.0 on March 25, 2026, it did something more significant than refresh a successful scheme. It changed the question. UDAN 1.0 asked: how do we get planes to places that don’t have them? UDAN 2.0 asks something harder and more consequential: how do we build an aviation ecosystem that actually lasts?
The numbers signal the seriousness of the ambition. At ₹28,840 crore – more than three times the ₹8,523 crore deployed under UDAN 1.0 — the scheme targets 100 new airports and 200 helipads to be developed over a decade, from fiscal 2027 through 2036. A new analysis by Crisil Intelligence maps what this means for India’s regional aviation landscape, and the picture it paints is one of structural transformation rather than incremental expansion.
What UDAN 1.0 Actually Built
To understand where UDAN 2.0 is going, it helps to appreciate what the first version genuinely achieved – and where it fell short.
Between fiscal 2017 and 2026, UDAN 1.0 operationalised 79 new airports, expanding India’s total airport count from 77 to 163. UDAN airports now account for 58% of all airports in the country, up from 21% a decade ago. The North-East – Arunachal Pradesh, Assam, Meghalaya – was brought onto the aviation map in a meaningful way for the first time. So were the Himalayan states of Himachal Pradesh and Uttarakhand, and large parts of eastern India including Odisha, Jharkhand and Bihar.
Post-Covid traffic data tells a particularly compelling story. While overall domestic passenger growth between fiscals 2020 and 2025 was 1.2 times, several UDAN-enabled airports recorded growth in multiples. Agra, Hindon and Tezpur grew between 7 and 10 times. Jalgaon, Bhuj and Diu grew 3 to 5 times. Smaller, previously underserved airports, it turns out, have extraordinary latent demand — once you give them capacity, travellers arrive in numbers that dwarf the national average.
Two airports – Hindon and Kannur – have now crossed the one million annual passenger mark in FY26, demonstrating that UDAN routes can, with sustained investment, graduate from thin regional services to genuine aviation anchors.
The honest caveat, however, is that UDAN airports still contribute only 2 to 3% of total domestic passenger traffic – a figure that reflects how limited flight operations remain at most of these facilities. Scale and spread are not the same thing.
The Architecture of UDAN 2.0
Where UDAN 1.0 was primarily a demand-side intervention – incentivising airlines through route-based viability gap funding (VGF), fare caps, and the revival of dormant airstrips – UDAN 2.0 is a supply-side infrastructure programme with demand-side support baked in.
The capital allocation tells the story clearly. Airport development takes the largest share at 42%, reflecting a commitment to building facilities that can sustain operations rather than simply opening them. Extended VGF support accounts for 35%, ensuring that thinner, commercially marginal routes remain viable long enough to build their own passenger base. Helipad development receives 13% of the outlay — a recognition that for truly remote terrains, fixed-wing connectivity is neither practical nor sufficient. Operations and maintenance for existing airports gets 9%, addressing a chronic weakness of UDAN 1.0 where newly opened airports sometimes struggled to remain functional. And 1% is earmarked for the acquisition of indigenously manufactured regional aircraft — a small but symbolically significant investment in domestic aerospace manufacturing.
Together, these allocations represent what Crisil Intelligence describes as a shift “from a connectivity initiative to a structural aviation infrastructure programme.”
The Destinations That Matter Most
UDAN 2.0’s geographic focus sharpens on the pockets that even UDAN 1.0 could not fully reach. The North-East and northern hilly terrains remain central priorities. But the scheme also targets remote and aspirational districts in central and eastern India — regions where the absence of air connectivity is not just an inconvenience but a barrier to economic participation.
Island and coastal regions get dedicated attention too. Andaman and Nicobar, and Lakshadweep – where sea travel remains the default and journey times are measured in days rather than hours – are explicitly identified as beneficiaries of expanded helicopter and small aircraft connectivity. For tourism, this is potentially transformative. Both archipelagos sit among India’s most extraordinary natural destinations, chronically undervisited simply because getting there is too hard.
What It Means for Travel and Tourism
For India’s travel ecosystem, UDAN 2.0 carries implications that extend well beyond aviation statistics.
Every new airport or helipad that makes a remote destination reachable is, functionally, a new tourism product. The tribal heartlands of Jharkhand, the living root bridges of Meghalaya, the valley monasteries of Himachal Pradesh, the coral reefs of Lakshadweep – these are not undiscovered. They are underleveraged, primarily because the journey to reach them defeats the purpose of the holiday. Reduce the friction, and demand follows, as the UDAN 1.0 traffic numbers already demonstrate.
The indigenous aircraft acquisition component also matters for tourism in a way that is easy to overlook. Regional aircraft manufactured in India, operated on Indian routes, serviced by Indian engineers, represents a self-reinforcing ecosystem that reduces dependency on imported capacity and keeps more of the economic value of regional travel within the country.
The Road Ahead
Crisil Intelligence projects that UDAN’s share of total airport capital expenditure – historically limited to 2 to 5% – will meaningfully increase to around 6% over fiscal years 2027 to 2031, driven by the higher outlay under the new scheme. The passenger traffic share from UDAN routes is expected to remain broadly stable in percentage terms, even as the absolute numbers grow – a function of how rapidly the overall Indian aviation market continues to expand.
The larger promise of UDAN 2.0 is not a number. It is a principle: that the benefits of India’s aviation boom should not remain concentrated in its metros and major cities, but should reach the districts and terrains and communities that have historically been left off the map – sometimes literally.
India’s skies are getting bigger. UDAN 2.0 is the most serious attempt yet to make sure everyone gets a seat.
Source: Crisil Intelligence Impact Note on UDAN 2.0, 2026
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