Tata's ₹1 cr payout for crash victims is largest in India, but falls short of global norms

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After the fatal crash of an Air India flight bound for London's Gatwick Airport shortly after takeoff from Ahmedabad, the Tata Group announced ₹1 crore in compensation for each victim's family, the highest ever by a private Indian firm.
According to the latest reports, 265 people lost their lives in the incident, and based on its announced payout, the group is liable for a total compensation of around ₹265 crore. However, this figure falls way short of international norms under the Montreal Convention. A conservative calculation, based on international norms, shows that compensation for a tragedy of this magnitude would be around ₹477 crore.
On Thursday, Tata Group said that in addition to the ₹1 crore compensation, it will also cover the medical expenses of the injured and help rebuild the BJ Medical College hostel damaged in the incident.
Compensation rules
The International Civil Aviation Organization (ICAO) has set compensation rules under the Montreal Convention, requiring airlines to pay for deaths and injuries during international flights. Thus, airline companies are required to compensate the families of deceased passengers with 1,51,880 Special Drawing Rights (SDRs).
The value of an SDR is determined by summing the values of five currencies: the US dollar, Euro, Japanese yen, British pound, and Chinese yen. According to the latest data from the International Monetary Fund (IMF), 1 SDR equals ₹116. This puts the mandatory compensation that Air India has to pay per victim between ₹1.7 crore and ₹1.8 crore—significantly higher than the ₹1 crore currently being offered by its parent Tata Group.
The Boeing 787-8 Dreamliner, operating as flight AI-171 to Gatwick, was carrying 230 passengers and 12 crew members when it collided with a staff hostel for medical personnel, setting off a massive blaze. Police officials confirmed that 265 bodies had been transported to hospitals, suggesting that at least 24 fatalities occurred on the ground.
Though it falls short of the international norms, the damages are sufficiently higher than what the Equal Compensation Bill, introduced in 2022, mandates.
As per the Bill, the highest compensation amount liable to be paid to the kin of victims who lose their lives in an accident is ₹20 lakh. If any individual suffers any permanent disabilities, the maximum compensation amount is ₹10 lakh and ₹4 lakh for temporary disability.