The government is looking to strengthen aircraft leasing and financing in India, with a high-level committee chaired by Civil Aviation Minister K Rammohan Naidu discussing taxation, funding and regulatory measures to support the sector, according to PTI.
The first meeting of the committee on aircraft leasing and financing was attended by senior officials from the civil aviation and finance ministries, the Department of Commerce, Directorate General of Civil Aviation (DGCA), Reserve Bank of India (RBI), International Financial Services Centres Authority (IFSCA) and industry associations.
Government explores easier aircraft financing
The panel discussed ways to create a more supportive environment for aircraft leasing and financing, with taxation, regulations, access to finance and ease of doing business among the key areas under consideration.
“Discussions included the potential for rupee-denominated financing for aircraft, greater clarity on the applicability of GAAR (General Anti-Avoidance Rule), and the possibility of renegotiating the Double Taxation Avoidance Agreement framework with Ireland,” an official release said.
The committee also examined measures that could improve access to funding for airlines and aircraft lessors. Naidu called for exploring ways to increase the allocation of bank credit to the aircraft sector and identifying joint ventures for technical and skill development in aircraft leasing.
422 aircraft leasing assets routed through IFSC
The government’s efforts to develop India as an aircraft leasing and financing hub have already resulted in increased activity through the International Financial Services Centre (IFSC).
According to the release, 422 assets, including 250 aircraft and 87 engines, have been leased through the IFSC so far. A total of 474 leasing agreements have also been signed. The IFSCA is the regulator for IFSCs.
Naidu said aircraft availability continues to be a major bottleneck for the country’s aviation sector. He stressed the need for a coordinated and time-bound strategy to resolve the regulatory, financing and taxation-related challenges identified by the committee.
The discussions come as India seeks to expand its aircraft leasing ecosystem and strengthen lessor confidence, while improving access to financing for the country’s growing aviation sector.