India's aviation maintenance, repair and overhaul (MRO) business is set to rise as a result of the government's plan to slash high custom duties on aircraft parts, tyres and other equipment.
Finance Minister Pranab Mukherjee in the Finance Bill 2012-13 has proposed to provide full custom duty exemption to new, retreaded tyres as well as testing equipment for aircraft which will be imported by third-party MRO units.
Aircraft parts and tyres currently attract around 30 percent basic and additional customs duty on import. Due to this, the domestic MRO sector had become uncompetitive.
Reading out his budget recipe, Mukherjee said: "India has the potential of establishing itself as a hub for third-party MRO of civilian aircraft."
According to a civil aviation ministry report, the Indian MRO industry is expected to triple in size from Rs.2,250 crore ($440 million) in 2010 to Rs.7,000 crore ($1,369 million) by 2020.
However, this is quite small when compared to present size of per annum MRO business in the UAE ($1,565 million) and China ($1,956 million).
08/04/12 IANS/Economic Times
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