It’s not the Indian government wanting to protect their local airlines from foreign competition. If it had been, then the joke wouldn’t be that Emirates is India’s national carrier. EK provides an international route network from India that puts to shame all Indian carriers together.

The European and European-routing North American carriers have traditionally scheduled their Indian flights mostly to arrive and depart India late at night (including the dark early morning hours) because the airlines wanted to maximize their fleet utilization and because the airlines scheduled that while keeping in mind their US and European connecting traffic in one or both directions. Once India became a major ITES center player, the European and European-transiting North American carriers decided to see what they could do to get in on the business action. Only then did the non-Indian carriers from the EU start making their schedules more useful for a person like me who may have wanted to arrive in India and stay less than 24 hours. What they encountered was the challenge of going up against India’s Emirates, Qatar and Etihad.

The North American and European carriers had dismissed Indians flyers for so long as being worth nothing more than low priced VFR traffic that by the time these carriers wanted into India in more major ways: Indian traffic was already in the pockets of SW Asian and S Asian carriers; and the network and frequency of service provided by the GCC3 had become such competitive behemoths (by way of Indian VFR demand) that the North American and European carriers couldn’t defeat them — not defeat them in regards to network, nor in frequency, nor in just about anything else that mattered enough for the Indian market.

Even with the history of the Indian government owning some Indian airlines, the Indian airline industry never got a whole lot of meaningful competitive gain from whatever protectionism Indian politicians had still been inclined to give the Indian industry in more recent decades. If anything beside problems paying for its import bills got them to open the country for more competition from more non-Indian-state-owned players, it would have been the experience of Air India/Indian Airlines being so bad that would have done that.

SAS used to serve India. But SAS’s entries and exits into the Indian market have been a sort of contrarian business indicator for how the Indian market is going to do.