Tuesday, June 09, 2020

UP in advanced talks with Centre for aircraft MRO hubs in Jewar and Meerut

Close on the heels of finance minister Nirmala Sitharaman announcing measures to boost the domestic aviation sector a fortnight back, in which she said steps will be taken to make the country a hub for maintenance, repair and overhaul (MRO) of aircraft, the Uttar Pradesh government is in advanced talks with the Centre for setting up two MRO hubs — one in Jewar and the other in Meerut.
“India is one of the fastest-growing aviation markets in the world and has high growth potential. The government of Uttar Pradesh is in talks with an American and a French company regarding setting up of MRO facilities. Both the companies are ready, but have been asking for incentives such as GST relaxations. For this, the government of India needs to tweak its policies on MROs. If we don’t give them these incentives, they would rather go to Sri Lanka and Singapore,” state investment, export promotion and MSME minister Siddhartha Nath Singh said. There is no dearth of land in UP; so accommodating both the companies is not going to be a problem, he said.
Singh, who did not divulge the names of the companies, said while the MRO in Jewar will cater to bigger aircraft, the facility in Meerut will cater to smaller ones.
It may be mentioned that the Jewar International Airport in the National Capital Region has been conceived as the biggest civil airport project in Asia. An MRO complex has already been incorporated in the techno-feasibility study conducted by PWC and was the basis for global bidding of this PPP. The airport has been awarded to Zurich Airport International for development and is expected to generate revenues of Rs 1 lakh crore in 30 years after it becomes operational in 2023.
According to the techno-economic feasibility report for the Jewar airport, the MRO market demand arising out of India is expected to go up to $5 billion by 2036. “Only 10% of the MRO market is currently captured within India, with the remaining being done outside the country. The government of India, through the National Civil Aviation Policy (NCAP), has put in efforts towards promotion of a domestic MRO industry,” it noted, adding that the NCAP has recognised that the taxation policy in India with regard to aircraft parts has been a major hindrance towards the development of the MRO industry. “Thus, the policy recommends an overhaul in the taxation regime involving this sector,” the report said.
09/06/20 Deepa Jainani/Financial Express
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