NE BUSINESS BUREAU
NEW DELHI, FEB 26
Finance Minister Nirmala Sitharaman on Friday said the tax sops announced in the recent budget will give traction to the international financial sector in GIFT City.
Owing to cost-effective features, we have rapidly built on the IFSCA: Finance Minister Ms @nsitharaman at the India Aircraft Leasing Summit. pic.twitter.com/CR1RVXcJSw
— FICCI (@ficci_india) February 26, 2021
Speaking at the India Aircraft Leasing Summit, she said the government has rapidly built on the International Financial Services Centre (IFSC) owing to its cost-effective feature.
“The package announced through the budget is to give traction to the international financial sector in GIFT City,” Sitharaman said.
Sitharaman in her 2021-22 Budget speech had said that the government is committed to make the International Financial Services Centre (IFSC) in GIFT City a global financial hub.
“In addition to the tax incentives already provided, I propose to include, among others, tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals paid to foreign lessors; tax incentive for relocating foreign funds in the IFSC; and to allow tax exemption to the investment division of foreign banks located in IFSC,” she had said.
Gujarat International Finance Tec-City (GIFT City) is the country’s only international financial services centre.
Time for India to step into new game of international financing of onshore and offshore services for aviation: Mr Dipesh Shah, Head-Development, IFSCA at the India Aircraft Leasing Summit. pic.twitter.com/H4oRBTUv85
— FICCI (@ficci_india) February 26, 2021
Ireland’s Acumen, few other players to participate in aircraft leasing biz at GIFT City: Kharola
Citing “green shoots”, Union civil aviation secretary Pradeep Singh Kharola on Friday said Ireland’s Acumen Aviation, Vman Aero, Investec and JetSetGo are among the players interested in participating in the aircraft leasing business at the GIFT City.
India, one of the largest civil aviation markets in the world, has been working on ways to promote aircraft leasing activities in the country and tax incentives were also announced in this regard in the latest Union Budget presented by Finance Minister Nirmala Sitharaman on February 1.
Against this backdrop, Kharola mentioned various players being interested in participating in aircraft leasing activities at the Gujarat-based GIFT City, which is home to the country’s first International Financial Services Centre (IFSC).
Noting that there are “green shoots”, the secretary said that Ireland-based lessor Acumen Aviation will be participating in the aviation lease financing activities at the GIFT City.
Acumen Aviation will also be starting a one-year postgraduate dedicated programme in aircraft leasing and financing.
Besides, Mumbai-based aviation consultancy Vman Aero will set up an aircraft leasing company called VMan Aero LLP, he added.
According to him, another lessor Investec will set up its subsidiary at the GIFT City while private jet operator JetSetGo Aviation Services Pvt Ltd is in the process of establishing a leasing entity there.
Further, SpiceJet has plans to lease seaplanes from India and HAL will explore the possibility of channelising a lease agreement — being discussed with Alliance Air for two Dornier aircraft — through the IFSC.
“With all these green shoots, it is time that lease financing activity is about to take off in India,” Kharola said.
Speaking at the India aircraft leasing summit in the national capital, Kharola also said the number of planes in the country will increase to 1,200 from over 700 at present in the next few years. These will include freighters, whose number has risen to 25.
While noting that so far, not a single aircraft has been leased from India, he said that airlines have found lease financing to be the most suitable option.
“Leasing is an efficient means to meet short term requirements without burdening balance sheets of airlines. Aircraft financing is also the most profitable segment of the aviation value chain,” he said.
Addressing the summit, Sitharaman said there is a need for aggressive participation of lessors and airlines in the aircraft leasing business in India.
She urged Indian and global airlines to participate in the government’s endeavour.
In her Budget speech, earlier this month, Sitharaman said the government is committed to making the IFSC in GIFT City a global financial hub.
“In addition to the tax incentives already provided, I propose to include, among others, tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals paid to foreign lessors; tax incentive for relocating foreign funds in the IFSC; and to allow tax exemption to the investment division of foreign banks located in IFSC,” she had said.
