Civil Aviation Minister Hardeep S Puri said that India must leverage its growing air traffic to establish a robust aircraft leasing industry. Addressing the India Aircraft Leasing Summit 2021 recently, Puri said that it is vital to develop this new line of business in India for financial services and add India on the map of global financial centers for international financial services.
He added that the Indian Aviation sector is on a path to recovery and has exhibited significant recovery to pre-Covid levels in terms of passenger movement and cargo operation. Concerted efforts are being made to attract new business into India, such as through aircraft leasing, financing, and MRO operations.
Puri informed that to commensurate with the growth potential of Indian aviation sector, in the next 20 years, India will need 1,750-2,100 aircraft valued at over Rs 20,40,000 crore, with an estimated 100 deliveries each year, USD 5 billion of financing each year as per predictions of Airbus and Boeing.
The Minister highlighted that aircraft financing is the most profitable segment of the aviation value chain and currently, foreign financiers and lessors are the biggest beneficiaries of India's growing opportunity.
He informed that several initiatives have been taken by the Government to develop Aviation leasing and Financing Hub in India which included Financing, MRO, manufacturing etc. to rapidly expand this business in India.
Puri said that as dynamic nature of business in IFSCs requires high inter-regulatory coordination, IFSCA (International Financial Services Centre Authority) has been established as unified regulator to promote ease of doing business in IFSC and to provide world class regulatory environment.
India has created a highly effective system for aircraft leasing and financing which is comparable to that of Ireland, China, Hong Kong, Singapore and elsewhere. The purpose is to grow India’s financing market, which is critical to the development of aviation industry, creating high aspirational jobs in the sector and in turn propelling India’s growth.