Plans to set up an aircraft leasing system in India will continue irrespective of a change of government, according to Vandana Aggarwal, former senior economic advisor to the civil aviation ministry.
“In the history of economic reforms, there are no reversals – no matter which government comes in place – in something which is good and lucrative and profitable with all stakeholders vying for it. I see no room for any reversal of any sort or even a slowdown,” Aggarwal said Tuesday during a session on attracting aircraft lessors to India at a webinar organised by ishka with Acumen, Bird and Bird, Investec, KPMG and Sarin & Co.
Aggarwal was a key official tasked with setting up and implementing a proposal for kickstarting aircraft leasing in the country. Indian carriers currently lease aircraft from Ireland and Singapore.
In 2019, the civil aviation ministry had identified the International Financial Services Centre (IFSC) in GIFT City, Gujarat, for developing the aircraft leasing and financing ecosystem in the country. The IFSC was started in 2015 to support financial service transactions such as aircraft leasing that are currently carried on outside India in a bid to attract such business to India.
Emphasising the role of the IFSC, Aggarwal said a domestic lessor has contracted to lease an aircraft from a foreign manufacturer.
“Another lessor has brought in a plane in advance and subject to all the clearances happening very quickly, that aircraft is ready to be leased out,” Aggarwal said.
Dipesh Shah, head of business development at the International Financial Services Centres Authority (IFSCA), said 15 companies were in very advanced stages of submitting their applications to IFSC.
The need for aircraft leasing was felt as India is expected to get over 1,000 aircraft by 2025-2026. Unlike abroad, almost 70 percent of the aircraft operating in India are on lease.
When the IFSC was set up, the finance ministry was of the view that if the centre was not developed, then India could avail of $120 billion in international financial services from offshore centers to satisfy domestic demand by 2025.
Nitin Sarin, managing partner of Sarin & Co., said the advantage of the IFSCA was that it has the powers of various regulators.
14/07/21 Ashwini Pahadnis/Moneycontrol
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