Aviation turbine fuel (ATF) tax relief announced by Delhi and Mumbai, India’s two largest aviation hubs, could provide meaningful cost support to airlines battling volatile crude prices, rupee weakness and rising operational expenses, industry experts said.
The move assumes significance because Delhi and Mumbai together account for a disproportionately large share of India’s airline traffic, fuelling activity and long-haul connectivity, giving any ATF tax cut at these hubs an outsized impact on airline economics.
Delhi government last week reduced VAT on ATF from 25 per cent to 7 per cent for an initial six-month period, while Maharashtra cut VAT on ATF in Mumbai from 18 per cent to 7 per cent.
Delhi Chief Minister Rekha Gupta said the move could result in an estimated revenue loss of nearly ₹985 crore for the government, but argued that the decision would boost aviation activity and give the national capital a competitive edge.
The tax cuts come at a time when airlines continue to grapple with elevated fuel prices and mounting cost pressures due to the West Asia crisis.
19/05/2026 Akshita Singh/Business Standard
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