Civil aviation secretary Pradeep Singh Kharola revealed that international aircraft financing and leasing companies namely Acumen Aviation from Ireland and Investec Aviation Finance from London will establish aircraft leasing arms at the International Financial Services Centre (IFSC) in Gujarat’s GIFT City, Mint reports.

Domestic companies like JetSetGo Aviation Services Pvt Ltd and aviation consultancy and asset management firm Vman Aero will join the foreign companies in this initiative. Union Budget 2021 promotes this vision by providing incentives and tax holidays on capital gains for aircraft leasing firms operating in the GIFT City.

Kharola said, “Aircraft financing is also the most profitable segment of the aviation value chain. Currently, foreign financiers and lessors are the biggest beneficiaries of India’s growing aviation strength.” He also claimed that India has created a well-organized ecosystem for leasing aircrafts as compared to those of Singapore, Hong Kong, Ireland, China etc.

Earlier, it was reported that multiple state-owned banks like the State Bank of India (SBI) are in negotiations with the government to form aircraft leasing arms at the IFSC.

Several advantages such as tax holidays spanning across 10 years, waiver of basic custom duty, stamp duty, waiver of capital gain taxes on aircraft disposal during the tax holiday period and even holding back tax on interest payments on royalty for non-residents will be provided to aircraft lessors at the IFSC.