Tag Archives: aviation hub

India is presently the world’s fastest-growing aviation market with demand surpassing the supply of aircraft and a strong order book of more than 1,500 aircraft from airlines in India. India’s skies are dominated by low-cost carrier IndiGo which holds around 60% market share and the Tata group airlines, with around 30% market share. As more than 80% of India’s commercial fleet is leased, there is tremendous potential for aircraft leasing activity within India. Even if some of these aircraft are leased from India, it will bring down the costs as the leases will be immune to exchange rate volatility. Leasing done through foreign jurisdictions like Ireland is vulnerable to exchange rate fluctuations. GIFT City – Can it snatch leasing business from Dublin? The Government of India has recognized the potential of the aircraft leasing and financing business. Accordingly, in October 2020, ‘aircraft lease’ was designated as a ‘financial product’ that can be offered by entities set up in International Financial Services Centres (“IFSCs”) in India. IFSCs are essentially special economic zones dedicated to financial services. IFSCs provide tax benefits and flexibility in foreign currency transactions. In the last few years, there has been a surge in activity from the Gift City, India’s first IFSC, with more than 28 aircraft lessors already registered, which have leased more than 120 aviation assets, including aircraft, helicopters and engines. The success of GIFT city to a large extent hinges on tax incentives. Recognising this, the Indian Government provides a range of tax benefits to units established in the GIFT City, similar to some of the well-established aircraft leasing hubs like Ireland, Singapore, and Dubai. These tax benefits include a tax holiday for any 10 …

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