India has reinitiated efforts to privatize 13 airports as part of its broader asset monetization strategy, with the goal of completing the process by the end of FY26. According to a report by The Economic Times, the Ministry of Civil Aviation has commenced inter-ministerial consultations to advance the initiative.

This renewed push follows Union Finance Minister Nirmala Sitharaman’s Budget 2024 announcement, which set an ambitious target of monetizing ₹10 lakh crore worth of assets over the next five years under Phase II of the National Monetisation Plan (NMP).

Previously, the government had identified several airports for privatization between 2022 and 2025 under the National Monetisation Pipeline (NMP). In 2021, the Airports Authority of India (AAI) approved 13 airports for the second phase of privatization; however, the list was later reduced to 11 after the Madhya Pradesh government opposed the inclusion of Raipur and Indore airports.

A key revision in the current approach involves bundling smaller airports with larger ones to enhance the attractiveness of bidding opportunities. Proposed pairings include:

• Varanasi with Kushinagar and Gaya
• Amritsar with Kangra
• Bhubaneswar with Tirupati
• Raipur with Aurangabad
• Indore with Jabalpur
• Tiruchirappalli with Hubli

This strategy addresses concerns that privatizing only profitable airports leaves AAI with financially unviable assets while also raising monopolistic concerns within the sector.

Meanwhile, the Finance Ministry has directed all departments to develop a three-year infrastructure pipeline to attract investments through the Public-Private Partnership (PPP) model, with airport monetization playing a crucial role.

However, industry experts and private equity investors remain cautious. Infrastructure executives cited by The Economic Times noted that investor interest may be limited unless the government enhances bidding terms. The relatively smaller size of some airports and the bundling of unviable ones could deter potential bidders.

“Private equity investors prefer well-established assets that can generate efficient returns. They are not in the business of developing new assets from scratch,” an infrastructure-focused private equity fund manager told ET.

As the government moves forward with its privatization roadmap, investor response will be a critical factor in determining the success of this asset monetization initiative.