India’s civil aviation market is currently the fastest growing market and ranks as the third largest globally. In span of last few years, the domestic carriers in India have placed an unprecedent orders for hundreds of aircrafts with international manufacturers involving financial commitments running into billions of dollars.1 This extraordinary expansion has positioned India as one of the most significant markets for global aircraft manufacturers, lessors, and financiers.
But commercial growth alone is not enough. Capital follows confidence and that requires legal certainty, the assurance that if an investment goes wrong, the law will provide a reliable, timely, and effective remedy. For too long, India’s aviation finance framework failed to provide that assurance. Foreign creditors who leased aircraft to Indian airlines found themselves trapped in protracted litigation when airlines defaulted, watching asset values erode while courts slowly worked through disputes that should have been resolved in weeks.
The Protection of Interests in Aircraft Objects Act, 2025 and the Protection of Interests in Aircraft Objects Rules, 2026 (2026 Rules) are India’s answer to this challenge. By giving domestic legal force to the Cape Town Convention, the globally accepted framework for aircraft finance that India had signed in 2008 but never fully implemented vide domestic legislations. Now, it’s a time when India finally bridges the gap between India’s international commitments and its domestic legal reality. That which was once a treaty on paper is today an enforceable law on the ground and India stands alongside the world’s leading aviation finance nations in offering foreign investors a legal framework that is certain, reliable, and internationally recognised.
These Rules are designed to address long-standing enforcement gaps. While the Act establishes the substantive legal framework, the Rules provide the operational mechanism for its implementation. Together, they mark a structural shift in India’s aviation financing regime, aligning it with global best practices and transforming India from a jurisdiction approached with caution by international aircraft financiers into one offering greater legal certainty and creditor confidence.
30/05/2026 Love Kumar Gupta/SCC Times
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