By – Muskkan Talreja
Abstract
Infrastructure is widely used by governments to promote economic development but development economics suggests that infrastructure alone cannot generate sustainable development. With the help of Navi Mumbai International Airport as a pivotal case study, this article examines whether mega infrastructure is capable of becoming the driver for regional development. With Changi Airport of Singapore and Incheon International Airport of South Korea serving as comparative examples, it is argued that airport development becomes sustainable when it is backed by institutions, logistics, industries and planning.
Introduction
Airports are often thought of as engines of growth since they help in job creation, trade facilitation and attracting investments. However, development economists point out that merely having infrastructure is not sufficient enough for sustained development. In this context, the role of institutions, logistical chains and urban planning becomes essential.
An example of this debate is provided by the NMIA project. The NMIA project has been developed to act as a secondary international airport in the city of Mumbai in order to alleviate the burden on the already established airport, increase the cargo handling ability of the city and promote development in the entire Mumbai Metropolitan Region. Although this project is seen by some as a crucial component of India’s Viksit Bharat vision, there are questions about whether the economic benefits will outweigh the cost.
Instead of just looking at the number of passengers and the revenue of the airport, NMIA should be judged by its capability to enhance productivity, attract investments, optimize logistics and drive regional development that is inclusive. The central question is whether infrastructure can bring about development or whether development is possible only when infrastructure forms part of a much bigger economic environment.
Airports in Development Economics: Beyond Passenger Numbers
Infrastructure lowers transaction costs, improves market access and raises productivity. However, development economics distinguishes between physical infrastructure and infrastructure that produces lasting economic transformation. Infrastructure investment can generate direct, indirect, induced and catalytic impacts only under complementary conditions of institutional, transportation and industrial policies. Recent empirical research analysing 51 international airports in the ASEAN region found that airport performance depends not merely on infrastructure but also on operational efficiency and regional economic integration.
Transport economists, starting with Brueckner, argue that airport investment improves accessibility, attracts businesses and increases regional productivity, employment and GDP but only where the regional economy can absorb these gains. Further research across U.S. metropolitan areas similarly finds that airport-led growth depends on industrial capacity and human capital.
International Evidence: Airports Succeed Because of Ecosystems, Not Terminals
It is seen from the example of Singapore’s Changi International Airport and Incheon International Airport in South Korea that airport success is much more complex than just building terminal capacity or expanding runways. Singapore’s Changi is a part of the comprehensive plan to integrate aviation with port logistics, tourism and international business, additionally Terminal 5 at Changi Airport is built to enhance cargo logistics in the future. Likewise, Incheon Airport has been integrated into South Korean free economic zones, ports, manufacturing industry and metropolitan Seoul region to become the center of the logistics network. Thus, their success is a result of decades long industrial policies, logistics integration and efficient governance.
NMIA: Strong Economic Fundamentals, Partial Institutional Readiness
The present airport in Mumbai has always been running at full capacity and the NMIA has been established to cater to the extra demand for passengers and cargo services, with a total capacity of about 90 million passengers annually. The NMIA is situated in proximity to the Jawaharlal Nehru Port Trust (JNPT), the busiest container port in India and linked to South Mumbai via the Atal Setu sea link. It has the ability to create a logistics chain comparable to the one that has helped Incheon grow. This would improve cargo services and the capacity and connectivity of the airport could enable farmers, exporters, MSMEs and manufacturers to access international markets and attract investment. The number of passengers has gone up from approximately 5,000 passengers in December 2025 to over 22,000 passengers by late April 2026, with flight movements rising to about 160 per day.
However, there are several issues that exist. Unlike Changi and Incheon, which have been built in conjunction with free economic zones and industrial/logistics hubs, NMIA does not have such an ecosystem yet. Even though there have been quick real estate developments at Panvel, Ulwe and Dronagiri, the area is still lacking in manufacturing and logistics, as well as salient infrastructure like Dedicated Freight Corridor connections. There have been doubts raised by airlines about the higher charges levied by the airport, such as the landing charges, which would make airlines reluctant to move their operations to NMIA. However, there have been comments made that the costs of surface access, such as the tolls on Atal Setu Bridge, as well as taxi charges, might make the airport less appealing.
The Uneven Impact of Development
Development Economics examines not only whether total production increases but also who benefits from development and who bears its costs. NMIA is expected to benefit airlines, cargo operators, exporters, MSMEs, farmers alongside sectors such as tourism, hospitality, construction and real estate. The Government of Maharashtra projects an estimated 1% increase in the State’s GDP.
However, the expenses for the project have mainly fallen on the local community. More than 2,200 hectares of land were taken, causing 3,500 families to be displaced. By 2018, only about 400 of the 3,500 affected families had been rehabilitated, according to reports documenting the progress of the rehabilitation programme, while many residents continued to demand adequate housing, employment opportunities and livelihood restoration. Fishing unions claim that the scheme has resulted in a decrease in fishing grounds, loss of mangrove ecosystems and threats to the traditional livelihoods of Koli fishing communities in Ulwe and Uran. This shows that growth in GDP does not necessarily mean balanced sharing of the cost of development.
This project is highly environmentally questionable too. The diversion of the Ulwe and Gadhi rivers, destruction of mangroves and mudflats and construction in a low-lying coastal region increase flood risks and reduce climate resilience. Thus, in the long term, development cannot take place without environmental sustainability. In case of any failures on the side of economic benefits or due to environmental problems, it would eventually come at the cost of taxpayers.
Lessons from Global Airport Development
The experiences of Singapore’s Changi and South Korea’s Incheon airports demonstrate that airports contribute to long term economic development only when supported by strong institutions, integrated transport networks, industrial ecosystems and effective planning. Airports do not generate growth in isolation, they succeed as components of a broader economic system. Although NMIA has witnessed encouraging demand since its launch, it has yet to develop the institutional, industrial and logistics ecosystem that underpinned the long- term success of Changi and Incheon.
Conclusion
NMIA could become a significant factor for regional development but its successful operation will be based upon the economic system that exists around it. Thus the response to the question that was raised at the beginning is evident i.e. infrastructure alone does not develop but generates sustainable economic growth when accompanied by efficient institutional and connectivity systems.
About the Author
Muskkan Talreja is a third- year B.Com. LL.B. (Hons.) student at O.P. Jindal Global University and a member of the Economics and Finance Cluster of Nickeled & Dimed. She is interested in the intersection of law and economics, with a particular focus on infrastructure development, public policy and their impact on economic growth and governance.
Image Source: https://www.cntraveller.in/story/photos-navi-mumbai-international-airport/