Indian airlines are projected to need 2,300 planes worth $320 billion in the next 20 years amid unprecedented domestic passenger growth, aircraft maker Boeing said on Wednesday as it raised the forecast for the country.

As much as 85 per cent of the planes would be narrow-body and the rest would be wide-body.

The forecast is for the 2018-2037 period.

According to Boeing, India will need 1,940 single-aisle planes worth $220 billion and 350 wide-body aircraft valued at $100 billion.

At the current exchange rate, $320 billion is over Rs 22 lakh crore.

Around 10 regional jets worth less than $1 billion will be needed between 2018 and 2037.

'India continues to grow at a faster pace,' Dinesh Keskar, senior vice-president (Asia Pacific & India sales) at Boeing Commercial Airplanes, said.

Keskar also noted that aviation market in India is 'quite challenging' as most airlines are not making money even as there is strong passenger growth. He listed exchange rate, fuel prices and fare yields as the challenges.

Boeing has raised its long-term forecast for commercial airplanes in India citing unprecedented domestic passenger traffic and rapidly expanding Low Cost Carriers (LCCs).

In August last year, Boeing had projected that India would need 2,100 commercial planes worth $290 billion.

It noted that this year alone, more than 10 million passengers, on an average, have travelled within India each month.

'To meet this increased domestic air traffic growth, we see the vast majority of available airplane seats coming from LCCs,' Keskar said.

The success of this market segment would mean that more than 80 per cent of all new airplane deliveries in the country are single-aisles, he added.

According to him, the superior economics and fuel efficiency of the new 737 MAX airplane would be the perfect choice for Indian carriers.