Introduction: Madhya Pradesh Civil Aviation Policy 2025
The Madhya Pradesh Civil Aviation Policy 2025 positions the state as a future-ready aviation hub by offering targeted financial incentives, capital subsidies, and infrastructure support across the aviation value chain. The policy focuses on airports, airstrips, MRO facilities, air cargo hubs, flying training organizations, and aerotropolis development.
For investors and aviation companies, the policy is financially attractive but procedurally complex. Incentives are routed through multiple departments and aligned with industrial promotion frameworks. Therefore, professional subsidy structuring, and end-to-end advisory becomes essential to unlock the full benefit potential.
Aviation Investment Policy Madhya Pradesh – Incentive Framework
The policy creates a structured ecosystem to attract private aviation investments through fiscal support and infrastructure facilitation.
Incentives for Aviation Investments
|
Incentive Component |
Financial Benefit |
|
Capital support |
Linked with Madhya Pradesh Industrial Promotion Policy (IPP-2025) |
|
PPP participation |
Airport, heliport, airstrip development |
|
Land allotment |
Long-term lease through state agencies |
|
Ease of Doing Business |
Fast-tracked approvals via nodal department |
Incentives are not automatic and require financial modelling, project structuring, and inter-departmental coordination—areas where specialist consultants add measurable value.
Aviation Subsidies in Madhya Pradesh – Policy-Linked Benefits
The policy introduces direct and indirect subsidies to reduce both capital and operational costs.
Key Aviation Subsidies
|
Subsidy Area |
Benefit |
|
Viability Gap Funding (VGF) |
For regional and international routes |
|
VAT on ATF |
4% on non-RCS flights |
|
Night parking incentive |
VAT reduced to 1% |
|
Infrastructure support |
State-backed development |
Optimizing subsidies requires route economics analysis and incentive stacking, typically managed through professional advisory engagement.
MRO Policy Incentives Madhya Pradesh – Capital Subsidy Advantage
From an investment perspective, MRO development stands out as one of the most financially rewarding components of the policy.
MRO Hub Incentives
|
Incentive |
Financial Support |
|
Capital subsidy |
Up to 40% of plant & machinery + civil works |
|
Land lease |
Up to 99 years with 25% lease concession |
|
Lease moratorium |
Up to 5 years |
|
Mega project status |
For investments ≥ ₹500 crore |
|
Workforce facilities |
Hostels for employees |
A well-structured MRO project can recover 30–35% of initial capital cost, making advisory-led structuring critical.
Aviation MRO Hub Madhya Pradesh – Industrial Ecosystem Development
Beyond subsidies, the state promotes cluster-based MRO ecosystems.
Ecosystem Benefits
|
Area |
Support |
|
Aviation industrial parks |
Cluster-based infrastructure |
|
PPP participation |
State or PPP-mode development |
|
Long-term demand |
Aircraft maintenance driven by traffic growth |
Cluster eligibility, mega-project classification, and incentive alignment require advanced financial planning.
Airport Development Incentives MP – Infrastructure Expansion
The policy supports greenfield and brownfield airport projects.
Airport Infrastructure Incentives
|
Component |
Benefit |
|
Airport & heliport development |
State facilitation |
|
PPP model |
Private participation encouraged |
|
Allied infrastructure |
Cargo, MRO, support services |
Airport projects involve multi-agency approvals, making professional handling essential.
Greenfield Airport Policy Madhya Pradesh – Aerotropolis-Led Growth
The policy enables greenfield international airport development with aerotropolis planning.
Greenfield Airport Incentives
|
Benefit Area |
Incentive |
|
Airport development |
Policy-aligned support |
|
Aerotropolis |
Integrated logistics & real estate |
|
Economic corridor |
Indore–Ujjain–Dewas region |
Returns are maximized when aviation, logistics, and real estate incentives are financially integrated.
RCS Route Subsidy Madhya Pradesh – Viability Gap Funding
Regional connectivity is strengthened through VGF support.
RCS & Route Incentives
|
Route Type |
VGF Support |
|
Domestic routes ≤ 750 km |
Up to ₹7.5 lakh per flight |
|
Domestic routes > 750 km |
Up to ₹10 lakh per flight |
|
International routes ≤ 1,000 km |
Up to ₹10 lakh per flight |
|
International routes > 1,000 km |
Up to ₹15 lakh per flight |
VGF eligibility and bidding economics require route-level financial assessment.
Air Cargo Policy Madhya Pradesh – Logistics & Agri Exports
In parallel, the policy positions air cargo as a high-growth investment segment with strong logistics linkages.
Air Cargo Incentives
|
Incentive |
Financial Support |
|
Cargo hubs |
State-supported development |
|
Krishi UDAN linkage |
Agri-export facilitation |
|
Infrastructure upgrade |
Airports & airstrips |
Cargo hubs unlock logistics, cold-chain, and export-linked incentives beyond aviation.
Flying Training Organization Subsidy MP – Skill Development Support
The policy strongly supports aviation skill infrastructure.
FTO Incentives
|
Incentive |
Benefit |
|
Capital subsidy |
Up to 40% |
|
Simulator support |
Eligible DGCA-approved equipment |
|
Land lease |
25% concession |
|
Lease moratorium |
Up to 2 years |
FTO incentives require DGCA + state policy alignment, best handled by experts.
Aerotropolis Policy Madhya Pradesh – High-Value Aviation Real Estate
At a larger ecosystem level, aerotropolis projects integrate aviation, logistics, and urban development to drive long-term value.
Aerotropolis Incentives
|
Area |
Support |
|
Integrated planning |
Airport-centric development |
|
Investment promotion |
Industrial policy linkage |
|
Long-term ROI |
Logistics + commercial real estate |
Returns depend on correct incentive stacking and land-use strategy.
Financial Assessment – Madhya Pradesh Civil Aviation Policy 2025
|
Segment |
Max Financial Benefit |
|
MRO facilities |
Up to 40% capital subsidy + land benefits |
|
Airports & aerotropolis |
Infrastructure + PPP incentives |
|
RCS routes |
Up to ₹15 lakh per flight |
|
Air cargo hubs |
Logistics + agri export incentives |
|
FTOs |
Up to 40% capital subsidy |
Conclusion
The Madhya Pradesh Civil Aviation Policy 2025 offers one of India’s most comprehensive aviation incentive frameworks. However, the real value lies in correct interpretation, financial structuring, and coordinated execution.
For aviation companies, airlines, MROs, logistics players, and training institutes, working with a specialist subsidy consultant is not optional—it is strategic.
Finraja Consultancy Private Limited enables investors to:
- Maximize eligible incentives
- Structure projects for approval success
- Secure end-to-end subsidy realization
Call us now: +91 9373114747 or visit finraja.com/contact for quick assistance.
