GIFT City in Gandhinagar is on way to become India’s aircraft leasing hub, and may even be an alternative to Dublin as a global hub, which handles 60% of the world’s aircraft leasing business today.
In the last six months, aircraft leasing deals of Rs 3,000 crore have been made, including that by Air India which has acquired 4 aircraft in a finance lease transaction through GIFT- IFSC. Officials say more are expected this year.
The first of these aircraft, procured in September 2023, is expected to be delivered shortly. A senior government official said the lease agreements for the additional three aircraft were facilitated by HSBC Bank. Tata’s takeover of Air India has led to an order of 470 aircraft, potentially enhancing GIFT City’s position in the global aircraft leasing industry.
Both Air India and Indigo have established operations in GIFT city. Indigo is in the process of finalising lease transactions via GIFT-IFSC. Ireland and China currently dominate the international market, with about 80% of India’s commercial fleet being leased, versus a global average of 53%.
Additionally, helicopter leasing company Vman Aero Services, and business jet leasing firm ModAir Aviation, have set shop in GIFT City.
The Centre has introduced incentives to attract aviation businesses to GIFT City, including a decade-long tax exemption on profits, exemption from capital gains tax, no stamp duty, and GST-free transactions for activities conducted through the entities established here.
The government has been actively trying to get aviation players to set up shop at Gift City for the past two and half years.Despite registration by 30 aircraft leasing companies in GIFT City, fewer than 10 are operational. The government is working to increase this number and ensure full operational status for all registered firms.
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