The proposed Aircraft Objects Bill is anticipated to strengthen Gujarat International Finance Tech-City’s (GIFT City) position as an aviation leasing hub while reducing leasing costs for Indian airlines, according to Boeing India and South Asia President Salil Gupte in a report by The Hindu Business Line.
The bill, approved by the Union Cabinet in 2024, aims to lower leasing costs by granting lessors stronger legal rights, including absolute aircraft repossession in case of payment defaults. It is currently pending approval in the Rajya Sabha, with the next parliamentary session set to begin on March 10, 2025.
If enacted, the bill is expected to reduce risk premiums paid to lessors, potentially leading to lower airfares. It also includes measures to improve legal certainty, streamline asset recovery, and enhance investor confidence, which could encourage leasing firms to operate from GIFT City.
Most commercial aircraft in India are currently leased from lessors based in Ireland, Dubai, and other global financial centers. The bill's provisions aim to establish India as a competitive location for aviation leasing, benefiting both domestic airlines and international leasing firms.
Industry estimates suggest that without such legislation, Indian airlines would have incurred nearly INR 100 billion in additional costs due to high-risk premiums.
Gupte also highlighted India's air cargo sector, citing projections of 6.9% annual growth in domestic air cargo trade over the next two decades. The country’s dedicated freighter fleet has grown from six aircraft in 2017 to 18 in 2024, reflecting rising demand driven by e-commerce expansion.
Boeing’s Commercial Market Outlook forecasts that South Asia’s commercial aircraft fleet will grow nearly fourfold to 2,835 aircraft over the next 20 years, with over 2,500 deliveries expected for India-based airlines. This growth is attributed to increasing air traffic demand, economic expansion, and infrastructure investments.
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