Aircraft leasing summit pushes GIFT City as global hub

India's second aircraft leasing and financing summit, anchored on the new PIAO Act and the GIFT-City IFSC.

What happened

• The Ministry of Civil Aviation (MoCA), with the International Financial Services Centres Authority (IFSCA) and industry body FICCI, held the second India Aircraft Leasing and Financing Summit — IALFS 2.0 on 8 May 2026 at GIFT City, Gandhinagar, Gujarat. The inaugural edition was held in 2025.
• The Union Civil Aviation Minister presided over the summit; the Gujarat Chief Minister attended as Chief Guest, signalling the centre–State stake in turning GIFT City into an aviation-finance address.
• The summit was timed around a landmark legal change: the Protection of Interests in Aircraft Objects (PIAO) Act, 2025 has been enacted, giving India's framework full alignment with the Cape Town Convention and addressing past delays in exercising lessor repossession (IDERA) rights.
• A High-Level Stakeholder Committee for aircraft leasing was constituted, and a Credit Line Guarantee Scheme with a ₹5,000-crore outlay was approved for airlines.
• An MoU between IFSCA and FICCI was signed to promote the GIFT International Financial Services Centre (IFSC) as a global hub for aviation finance.
• The headline market case: India's commercial fleet is projected to grow from roughly 1,100 aircraft by 2027 to more than 2,250 by 2035, with 1,640 aircraft already on order — a leasing opportunity put at about USD 50 billion over the decade.

Background & context

Almost every commercial aircraft an Indian airline flies is not owned by that airline — it is leased. Globally, leasing companies (lessors) own well over half of the world fleet, and Indian carriers have historically relied on lessors based abroad, principally in Ireland (Dublin's long-established leasing cluster) and other low-tax jurisdictions. The money for the metal, the legal domicile of the lease, and the tax treatment of the rentals therefore sat overseas, while India supplied only the demand. The policy idea behind this summit is to relocate that financial activity onto Indian soil — specifically into the GIFT-City IFSC — so that the leasing margin, the jobs, and the legal jurisdiction are captured at home.

That ambition has a named delivery vehicle. GIFT City (Gujarat International Finance Tec-City), at Gandhinagar, hosts India's first International Financial Services Centre, a ring-fenced financial zone treated as offshore for regulatory and tax purposes. Its unified regulator is the IFSCA, set up under the IFSCA Act, 2019, which folds the powers that RBI, SEBI, IRDAI and PFRDA would otherwise exercise into a single authority for the zone. Aircraft leasing was notified as a permissible "financial product" in the IFSC, allowing lessor entities to set up there. The leasing push therefore is one strand of a wider effort — alongside fund management, banking units and an international bullion exchange — to make GIFT IFSC a credible competitor to Dubai, Singapore and Dublin.

The missing piece was legal certainty for the lessor. A lessor will only domicile aircraft and capital in a country if, when an airline defaults or goes insolvent, it can swiftly and predictably take its aircraft back. India's earlier experience — most visibly the prolonged disputes over repossessing grounded aircraft during a major airline insolvency — taught lessors that Indian court processes and the interaction with insolvency law could stall recovery for months. The fix is the new PIAO Act, 2025, which converts India's earlier executive-level adherence to the Cape Town framework into hard primary legislation that prevails over conflicting domestic law, removing exactly that uncertainty. IALFS 2.0 is, in effect, the showcase event for telling global lessors that the legal risk has now been closed.

For Prelims

• IALFS 2.0: India Aircraft Leasing & Financing Summit, 2nd edition; held 8 May 2026 at GIFT City, Gandhinagar; first edition 2025. Organised by MoCA with IFSCA and FICCI.
• Nodal ministry: Ministry of Civil Aviation. Co-anchors: IFSCA (the IFSC regulator) and FICCI (industry chamber, not a government body).
• PIAO Act, 2025 (full form): Protection of Interests in Aircraft Objects Act. It is the domestic statute that gives binding force to India's commitments under the Cape Town Convention and its Aircraft Protocol, fixing the priority of lessor and financier "international interests" and securing IDERA-based repossession.
• IDERA: Irrevocable De-Registration and Export Request Authorisation — the instrument under the Cape Town framework that lets a lessor de-register and export an aircraft on default. The PIAO Act addresses earlier delays in honouring IDERA filings.
• Cape Town Convention: the Convention on International Interests in Mobile Equipment, adopted at Cape Town in 2001 and in force from 2006, with a dedicated Aircraft Protocol; it standardises cross-border security interests in high-value mobile assets (aircraft, and through separate protocols, railway rolling stock and space assets). It is administered with UNIDROIT (and ICAO as the registrar authority for the Aircraft Protocol's International Registry).
• GIFT City / IFSC: Gujarat International Finance Tec-City, Gandhinagar — site of India's first International Financial Services Centre, an offshore-treated financial zone regulated by the IFSCA (established under the IFSCA Act, 2019). Aircraft leasing is a notified permissible activity there.
• Money figures: Credit Line Guarantee Scheme — ₹5,000-crore outlay, for airlines. Fleet outlook — ~1,100 aircraft by 2027, 2,250+ by 2035; 1,640 aircraft on order; ~USD 50 billion leasing opportunity over the decade.
• Institutional add-ons: a High-Level Stakeholder Committee for leasing was constituted; an IFSCA–FICCI MoU was signed to market GIFT IFSC as a global aviation-finance hub.
• What it is NOT: The PIAO Act is not the Cape Town Convention itself — it is the Indian law that domesticates it; India had already acceded to the Convention, but earlier the treaty had not been backed by overriding primary legislation, so insolvency and court processes could override it. The summit is not a treaty signing and IALFS is not a multilateral grouping — it is a periodic industry summit. IFSCA is not the RBI or SEBI; it is a separate unified regulator confined to the IFSC. FICCI is not a statutory regulator; it is a private industry association.

Why it matters

The problem this addresses is leakage of financial value. When a carrier in Delhi leases a jet domiciled in Dublin, the lease income, the structuring fees and the tax base accrue abroad; India captures only the operating activity. By building leasing capacity inside the GIFT IFSC and removing the legal risk that kept lessors away, the policy tries to onshore an entire financial sub-industry. The market backdrop makes the stakes large: with 1,640 aircraft on firm order and a fleet set to more than double by 2035, the financing flows are measured in tens of billions of dollars, and even a modest share captured domestically is significant.

The legal reform is the load-bearing element. Capital is risk-averse and globally mobile; a lessor compares jurisdictions on one decisive question — can I get my asset back, fast and predictably, on default? Cape Town adherence reduces a country's perceived risk and, in practice, lowers the financing cost airlines pay. India's earlier difficulty enforcing repossession against an insolvent carrier was a visible deterrent. The PIAO Act answers it by giving the Convention's protections statutory primacy, which should narrow the spread between Indian and offshore leasing and make GIFT a genuine alternative rather than a subsidised curiosity. The ₹5,000-crore Credit Line Guarantee Scheme complements this by easing airlines' access to working capital, while the stakeholder committee institutionalises the consultation needed to keep the ecosystem competitive.

For Mains