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U.S. planemaker Boeing Co forecast on Tuesday that Indian airline capacity would be 7% higher in the first half of 2023 than in 2019 before the pandemic, amid a strong rebound in the world's fastest-growing major domestic aviation market.

Over the next 20 years, Indian passenger traffic is expected to grow by 7% annually, requiring 2,210 new planes, Boeing said on the sidelines of the Aero India air show, the country's biggest aviation event.

India's former state-run carrier Air India, which is now owned by Tata Group, is expected to announce a major deal this week for nearly 500 jets, worth more than $100 billion at list prices, split between Boeing and Airbus, Reuters has reported.

"The Indian market is recovering rapidly and its domestic capacity has exceeded 2019 levels, with domestic traffic expected to double by the end of this decade," Dave Schulte, Boeing Commercial Marketing managing director for Asia Pacific, said in a statement.

Boeing said it expects 90% of India's demand for new airplanes will be for single-aisle airplanes like the 737 MAX over the next 20 years.

On Monday, Boeing said it plans to invest about $24 million in India to set up a logistics centre for airplane parts to boost its footprint in the country that it considers as the third-largest domestic aviation market in the world.