The Ministry of Civil Aviation held the first meeting of a High-Level Committee on Aircraft Leasing and Financing, chaired by Civil Aviation Minister Ram Mohan Naidu. The committee aims to build a strong aircraft leasing and financing system in India as the country’s aviation sector expands. The meeting brought together senior officials from multiple government ministries, regulators, and industry representatives to identify practical solutions.
What the committee will focus on
The committee discussed several key areas to improve India’s aircraft leasing business. These include taxation rules, regulatory frameworks, access to bank credit, and ease of doing business measures. Specific topics under consideration are rupee-denominated financing for aircraft, the application of General Anti-Avoidance Rule (GAAR) provisions, and possible renegotiation of the Double Taxation Avoidance Agreement with Ireland.
The Minister noted that India has already made progress in this area. Through the International Financial Services Centre (IFSC), 422 assets have been leased, comprising 250 aircraft and 87 engines. Additionally, 474 leasing agreements have been signed. The government previously enacted the Protection of Interests in Aircraft Objects Act to address industry concerns about legal certainty.
The committee also intends to explore ways to increase bank lending to the aircraft sector and develop joint ventures for technical training and skill development in aircraft leasing.
What this means for you
Indian airlines currently lease more than 85 percent of their aircraft, making them dependent on the global leasing market. A stronger domestic leasing ecosystem could reduce costs and improve aircraft availability, potentially leading to more affordable flights and better connectivity across the country. For businesses and investors, clearer rules and predictable policies will make it easier to participate in India’s growing aviation industry. Ultimately, passengers should see more flight options and better service as airlines gain easier access to aircraft.