This article ponders over the applicability of EU-ETS influenced schemes in the Indian Aviation Sector. In the first three sections it discusses the various policies of the Indian government for ensuring sustainable development. While mentioning these schemes, the authors underscore that these policies are not sufficient to keep a check on the emissions from the rapidly growing aviation sector and there is a need for a policy on the lines of EU’s ‘trade and cap’ principle to ensure sustainable development of the sector. A ‘trade and cap’ policy can ensure active participation of government and private entities in the sector, whereas such a policy can increase investment in sustainability and reduction of emissions. In the following sections, the authors, while dissecting the policy governing the European Union Emissions Trading Scheme (EU ETS), highlight pros and cons of the system and how it can be applied in the Indian aviation sector. The paper also dwells into the trade and cap policies already implemented by India, such as in the chemical industry. Finally, measures will be suggested which should be included in a trade and cap policy for the Indian aviation sector in order to achieve a significant and holistic growth of the sector while keeping environmental goals in mind. Also, airlines should be incentivized to invest in sustainable techniques and contribute substantially to the reduction cumulative sectoral emissions.