A boost to aviation leasing

A NEW BILL POSITIONS INDIA AND GIFT IFSC AS A STRONG CONTENDER FOR LEASING AIRCRAFT ASSETS

- AKHILESH TILOTIA ASHUTOSH SHARMA

India's civil aviation sector, one of the largest and fastest-growing in the world, is a cornerstone of its economic transformation. With India's aspirations of becoming a developed economy by 2047, civil aviation will play a critical role in connecting geographies, enabling trade, and fostering tourism. Over this period, the capital outlay required for acquiring commercial aircraft is expected to run into hundreds of billions of dollars; the financing ecosystem will hence play a critical role in the growth of the local aviation industry.

Globally, the aviation financing value chain includes various stakeholders such as leasing companies, institutional investors, financial institutions, and export credit agencies. India is developing an aviation leasing and financing ecosystem by encouraging global as well as domestic investors to establish aircraft leasing and financing companies in Gujarat International Financial Tech City (GIFT) International Financial Services Centre (IFSC). We believe that the introduction of the Protection of Interests in Aircraft Objects (PIAO) Bill, 2025, in the Rajya Sabha marks a milestone in reshaping the landscape of aircraft leasing and financing in India.

Aviation as a catalyst for growth Supported by rising demand, competitive market dynamics, and progressive policies, the Indian aviation industry has transformed in recent years to become the third largest domestic market in the world after the US and China.

The number of operational airports in the past decade has almost doubled to 157 with a stated aim of the government to increase it to more than 350 by 2047. Compared to other large economies, consumption of seats per head of population in India is still low. Apart from the growth of the domestic market, international connectivity from India is expected to rise as Indian airlines and airports build large symbiotic hubs.