- The India Aircraft Leasing Summit 2021 was held at Vigyan Bhavan Convention Centre, New Delhi on February 26, 2021. It was held in both physical & virtual modes.
- The theme of the summit was ‘Rupee Raftaar’.
- Organizers – Ministry of Civil Aviation & IFSC (International Financial Services Centres) Authority in collaboration with GIFT (Gujarat International Finance Tec)- City & FICCI (Federation of Indian Chambers of Commerce & Industry).
Key Points from Hardeep S Puri’s address
Growth Potential
In order to keep up with the growth potential of Indian aviation sector, in the next 20 years
- India needs 1, 750 – 2, 100 aircrafts valued at over INR 20, 40, 000 Crore.
- With estimated 100 deliveries each year (i.e about INR 35, 000 crore) of finance each year as per predictions of Airbus & Boeing.
- Globally, the leasing of aircrafts has increased dramatically from 2% in 1980 to 41% in 2018. It is estimated to reach 50% in 2020.
Profitable Segments
- The Civil Aviation Minister highlighted that Aircraft Leasing is the most profitable segment of the Aviation value chain, but at present not even 1 aircraft has been leased from India
- India is taking several steps to develop Aviation leasing & Financing Hubs in India which includes Financing, MRO (Maintenance, Repair & Overhaul), manufacturing to expand this business in India.
IFSCA as Unified Regulator
IFSCA (International Financial Services Centre Authority) has been established in India as a unified regulator for promoting ease of doing business in IFSC & for regulations.
Creating an Efficient system for Aircraft Leasing & Financing
India has created a highly effective system for aircraft leasing & financing which is comparable to systems of Ireland, China, HongKong, Singapore.
- Objective – To assist the growth of India’s financing market which will be critical to development of the aviation industry.
It will provide several benefits like
- Creation of an aviation financing system which supports financing of airport development as well as the Make-in India initiative for manufacturing of aircraft, helicopters, drones, air taxis etc.
- Develop new line of business in India for International Financial Services
- Add India on map of global financial centres for International Financial Services
- Generation of additional revenue for collection of taxes from ancillary industries & eventually through aircraft financing.
- Reducing Foreign exchange outgo
Note – India is the world’s second largest defence importer and third largest military spender.
Boosted by Union Budget 2021-22
In the Union Budget 2021-22, a Tax Holiday on capital gains & tax exemption for aircraft lease rentals paid to foreign lessors for doing so in GIFT City, Ahmedabad was announced.
- This has prompted many international & domestic companies to start aircraft leasing business in GIFT City, Ahmedabad.
Recent Related News:
i.On November 25, 2020, Indian Navy inducted two ‘MQ-9B Sea Guardian’ unarmed drones procured from the United States on lease. MQ-9B Sea Guardian became the first defence hardware to be procured on lease under the new Defence Acquisition Procedure (DAP) 2020.
About Ministry of Civil Aviation:
Minister of State (I/C) – Hardeep Singh Puri (Rajya Sabha MP representing the state of Uttar Pradesh)