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India is working towards strengthening GIFT City as a complete aircraft leasing and aviation financing hub instead of only a registration destination, Union Civil Aviation Minister Rammohan Naidu said during the India Aircraft Leasing and Financing Summit 2.0 in Gandhinagar. The government is focusing on legal, tax and financing reforms to support the aviation sector, which continues to witness strong growth. India’s commercial aircraft fleet is expected to expand sharply by 2032, while passenger traffic and airport infrastructure development are also seeing rapid growth. The Centre is additionally planning to boost domestic aviation financing and expand seaplane operations.
Union Civil Aviation Minister Rammohan Naidu said India is not looking to compete directly with established global aircraft leasing centres but wants to emerge as a strong complementary player by building a robust aviation financing ecosystem at GIFT City. Advertisement
Speaking at the inaugural session of the India Aircraft Leasing and Financing Summit 2.0 in Gandhinagar, Naidu said India’s aviation sector is expanding rapidly and is increasingly drawing global attention. He noted that the ecosystem being developed in India would also support neighbouring regions witnessing strong aviation growth.
The minister stated that the global aircraft leasing market is large enough to support multiple regional centres. According to him, India wants to establish itself as a global aviation player while continuing to complement the existing international leasing industry. He added that countries around India are also witnessing a surge in aviation activity and are likely to look at India as a regional leader in the sector.
Naidu said India must take the right policy and infrastructure steps to create an ecosystem that can support not only domestic aviation growth but also wider regional demand. He referred to the consultation paper issued by the International Financial Services Centres Authority earlier this year, which pointed out that many leasing activities in GIFT City still depend on offshore ownership, financing and transaction structuring.
He said the government now wants GIFT IFSC to evolve into a complete global leasing and financing hub where transactions are originated, structured, executed and managed within India itself instead of overseas markets. The government has been actively positioning GIFT City as an international financial services centre over the past few years through regulatory and tax reforms aimed at attracting global investors and aviation companies.
India is currently the world’s third-largest domestic civil aviation market, and Naidu said the country is on track to become the third-largest aviation market globally considering the present growth momentum. He added that India’s commercial aircraft fleet is expected to increase to 1,100 aircraft by 2027 and further expand to 2,250 aircraft by 2032.
Passenger traffic across domestic and international routes has already touched 191 million in 2026 so far, highlighting the continued rise in air travel demand. The minister also pointed out that GIFT IFSC had 38 registered aircraft lessors as of December last year, reflecting growing confidence in India’s aviation financing sector.
The government is also planning to launch seaplane operations in Lakshadweep shortly, which Naidu said could create significant opportunities for seaplane leasing businesses in the country. India had earlier explored seaplane services under regional connectivity initiatives, though operations remained limited due to infrastructure and operational challenges.
Naidu further said the ministry is working towards strengthening aviation financing within India through greater participation from domestic financial institutions. He stressed that rupee-denominated financing is becoming strategically important for the sector and should not remain limited to convenience-based financing.
According to him, the Centre is ensuring legal and tax reforms along with strong dispute resolution mechanisms and institutional support at GIFT City to help India compete with major global aviation financing destinations. He also noted that aircraft leasing and financing remains among the most profitable segments in the aviation industry value chain.
The minister highlighted that India recorded its highest-ever domestic passenger traffic of 5.3 lakh travellers in a single day during the past year. Since then, daily domestic passenger traffic has consistently remained above 5 lakh passengers, reflecting the strong demand and resilience of the aviation market.
He added that the government issued a record number of commercial pilot licences over the last year and committed more than INR 29,000 crore towards developing 100 airports and 200 helipads over the next decade. The Centre has also been pushing regional connectivity through the UDAN scheme while expanding airport infrastructure across smaller cities.
Naidu said the recently introduced Protection of Interests in Aircraft Objects Act, 2025 has aligned India’s legal framework with the Cape Town Convention, improving confidence among global lessors and financiers. He also noted that the Union Budget 2026 extended the tax horizon for IFSC leasing structures, giving international investors greater long-term clarity and predictability for investments in India’s aviation sector.
Source PTI
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