Here are the 10 big developments in the story:
GAGAN corrects distortion in GPS signals to the lowest precision point, providing very accurate information on the location of an aircraft in terms of latitude, longitude and height, along with velocity and time.
At present, when Air Traffic Controllers read aircraft movement from GPS signals, they leave more than 50 meters as a margin of error. GAGAN reduces the error margin to 3.5 metres.
"In short, it will be pack in more aircraft in the same airspace, accurately, predict the ground obstacles and thereby suggest shorter routes," says V Somasundaram, who heads the Navigational System Wing of the Airports Authority of India.
Efficient navigation and shorter routes will mean a saving on fuel costs.
The new system has been developed jointly by the Indian Space Research Organisation (ISRO) and AAI at a cost of about Rs 774 crore.
Only the US, Japan and Europe, and now India, have such augmented navigational system.
Three satellites across the country will map every movement of an aircraft over not just the Indian airspace but also over SAARC countries. GAGAN will provide augmentation service for GPS over India, the Bay of Bengal, South East Asia and the Middle East expanding up to Africa.
The system is now operational, but to use it airlines will have to install receivers on board to align their aircraft to these satellites.
Apart from increased fuel savings GAGAN will also help in vertical guidance at runways, significant cost savings as several ground aids will not be needed and reduced workload for flight crews.
The government has called a meeting of users in September to discuss GAGAN.