Bridging Distances, Unlocking Opportunities: UDAN Is The Future Of Regional And Advanced Air Mobility

Initiatives such as the Regional Connectivity Scheme — Ude Desh ka Aam Nagrik are key to expanding access, unlocking economic potential, and stimulating demand. Moving beyond sector-specific approaches, an integrated connectivity framework is essential. With the Union Budget 2025-26 prioritising regional air connectivity, India is poised for a transformative shift, providing a faster alternative to regional mobility.

The UDAN scheme has operationalised 619 routes, connecting 88 airports and enabling affordable air travel for 1.5 crore passengers. The latest budget expands UDAN with 120 new routes, boosting support for helipads and smaller airports, especially in remote and hilly regions. Notably, it emphasises warehouse facilities for air cargo, including provisions for perishable goods, strengthening supply chains. Enhanced connectivity will also spur tourism—including medical tourism—by linking key destinations more efficiently. This expansion is set to drive economic activity, improve social mobility, and unlock growth in aspirational districts, including the North East and tribal areas.

However, the budget allocation for the improvised UDAN scheme appears to fall short of the government's aspirations. The BE 2026 allocation for UDAN scheme has been trimmed to Rs 540 crore, much below the Rs 800 crore in the revised estimate for FY25. The budget had initially earmarked Rs 502 crore for the scheme for 2025.

By investing in regional connectivity, the government not only improves mobility, but also stimulates tourism, trade, and job creation. The increased air connectivity will attract businesses to tier-2 and tier-3 cities, fostering balanced urban development. However, challenges such as low occupancy, financial sustainability, inadequate infrastructure, and limited awareness about booking regional routes persist.

Initiatives such as the Regional Connectivity Scheme — Ude Desh ka Aam Nagrik are key to expanding access, unlocking economic potential, and stimulating demand. Moving beyond sector-specific approaches, an integrated connectivity framework is essential. With the Union Budget 2025-26 prioritising regional air connectivity, India is poised for a transformative shift, providing a faster alternative to regional mobility.

The UDAN scheme has operationalised 619 routes, connecting 88 airports and enabling affordable air travel for 1.5 crore passengers. The latest budget expands UDAN with 120 new routes, boosting support for helipads and smaller airports, especially in remote and hilly regions. Notably, it emphasises warehouse facilities for air cargo, including provisions for perishable goods, strengthening supply chains. Enhanced connectivity will also spur tourism—including medical tourism—by linking key destinations more efficiently. This expansion is set to drive economic activity, improve social mobility, and unlock growth in aspirational districts, including the North East and tribal areas.

However, the budget allocation for the improvised UDAN scheme appears to fall short of the government's aspirations. The BE 2026 allocation for UDAN scheme has been trimmed to Rs 540 crore, much below the Rs 800 crore in the revised estimate for FY25. The budget had initially earmarked Rs 502 crore for the scheme for 2025.

By investing in regional connectivity, the government not only improves mobility, but also stimulates tourism, trade, and job creation. The increased air connectivity will attract businesses to tier-2 and tier-3 cities, fostering balanced urban development. However, challenges such as low occupancy, financial sustainability, inadequate infrastructure, and limited awareness about booking regional routes persist.

But can the government harness new-age mobility technology to address these issues? Advanced Air Mobility presents a promising answer. By offering sustainable alternatives to traditional mobility, AAM reduces travel times. Journeys between major metros like Delhi, Mumbai, and Bengaluru to nearby cities within a 200-800 km range are often long and expensive, taking anywhere from four to 10 hours. AAM can complete these trips in just an hour.

This efficiency not only enhances connectivity, but also paves the way for faster, greener, and more accessible regional mobility in India's evolving mobility landscape.

Beyond urban areas, AAM can unlock new markets from aerial tourism to cargo logistics and emergency medical services, revolutionising mobility in semi-urban and rural India. It can enhance trade, healthcare, and industrial operations, while fostering economic and social equity. The rise of AAM also creates a booming Maintenance, Repair, and Overhaul sector, driving innovation, job creation, and infrastructure development, strengthening India’s aviation and logistics ecosystem. Socially, AAM supports inclusive development by linking underserved regions, ensuring equitable access to mobility. With its potential to drive both economic expansion and social equity, AAM stands as a transformative force in India’s mobility landscape.

The UDAN scheme is a catalyst for Advanced Air Mobility, expanding access to remote areas and building a foundation for future integration. The aviation sector has boosted travel, enhanced regional connectivity, and driven demand for diverse aircraft, doubling the fleet from 395 in 2014 to 800 today. With the sector growing at an 11% CAGR, UDAN’s infrastructure and policy push create a strategic pathway for eVTOLs to revolutionise regional mobility.

The recent guidelines on vertiports and eVTOL certifications have given a fillip to accelerating India’s AAM sector. Additionally, the Clean Tech Manufacturing Hub announced in the budget can pave the way for local manufacturing and component development in regional centers that can become hubs of innovation, attracting investment and creating high-skilled jobs.

While the budget allocations need impetus, the success of these initiatives will depend on rapid infrastructure development, regulatory adaptability, and public-private partnerships. The challenge lies in scaling AAM solutions from pilot projects to full-fledged commercial operations. Ensuring airspace safety, integrating AAM with existing transport networks, and fostering public trust in aerial mobility will be crucial for long-term adoption.

The Union Budget 2025-26 accelerates India’s vision for Viksit Bharat 2047, reaffirming its commitment to regional connectivity, with a plan to double the number of airports to 350. UDAN’s expansion will bridge mobility gaps in remote regions, while AAM initiatives can redefine urban and regional mobility. The focus must now shift from policy to execution, ensuring these investments drive real-world impact, making India a global leader in sustainable and future-ready mobility solutions.

Anish Michael is lead, Centre for Future Mobility at OMI Foundation.

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