Aircraft lessors based out of Gujarat International Finance Tec-City (GIFT City) are likely to lease out about 60 aircraft, including helicopters, by March 2023, said Dipesh Shah, executive director (Development), International Financial Services Centres Authority (IFSCA), on Wednesday.
“The aircraft leasing framework came out in 2021. And in just a few months after that, in August, the first aircraft was leased out from GIFT City in India,” Shah said during a conference organised by aviation consultancy firm Ishka. The IFSCA regulates the financial institutions present in GIFT City.
In May 2022, the IFSCA further enabled the IFSC framework and now, there are 17 aircraft lessors in GIFT City, Shah said.
“They have already released 11 aircraft into India.
And in this financial year, by March 2023, we have been given projections by 17 lessors that 40-50 more aircraft will be leased from GIFT City,” he added.
This means that by the end of March 2023, about 60 aircraft are expected to be leased out of GIFT City. However, none of these would be narrow-body aircraft like A320neo and B737 or wide-body ones like A350 and B787 that are mainly used by commercial airliners in India.
The 11 aircraft leased out of GIFT City to date include helicopters, regional aircraft, trainer aircraft and private jets.
Indian airlines have a combined fleet of around 700 planes, and over 85 per cent of them are on lease. A majority of lessors are based in Ireland due to its attractive tax policy and ease of doing business.
The Government of India and the Gujarat government have provided several incentives, such as tax holiday, no withholding tax on lease payments and interest payments, for the aircraft leasing companies to set up shop in GIFT City.
Shah said, “The aircraft leasing business has taken off from GIFT IFSC with a significant number of international and domestic lessors now setting up base here.”
“The response to the regulatory and competitive tax framework has been very encouraging,” he added. “Going forward, GIFT IFSC would be contributing immensely to the aircraft leasing opportunities, which are emerging from India.”