Indian domestic traffic had declined by 2.1 per cent in 2012, but went up four per cent last year, the International Air Transport Association (IATA) said in a study covering the global air traffic trends in entire 2013.
While capacity or the number of airplane seats in the market climbed 3.5 per cent in 2013, load factor averaged at 74.6 per cent, up 1.7 percentage points compared to 2012.
"The demand environment has been challenging in view of the weakening economy, high inflation and slowing manufacturing and resource industries," the IATA said.
Air travel in China and Russia experienced the strongest growth last year, with their domestic air traffic volumes expanding at 11.7 and 9.6 per cent.
In contrast, other BRIC states Brazil and India saw considerably slower rates of growth in domestic travel at 0.8 and four per cent respectively.
"In India, the demand backdrop has been difficult with the economy weakening over the past two years, showing high inflation and slowing manufacturing and mining industries," the study by the global airlines' body said.
Globally, the past year saw a 5.2 per cent increase in passenger demand compared to 2012, with capacity rising 4.8 per cent and passenger load factor averaging 79.5 per cent, up 0.4 percentage points over 2012. International traffic flown by the airlines of the Asia-Pacific region rose 5.3 per cent.
"We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year which bodes well for 2014," said Tony Tyler, IATA's Director General and CEO.