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Aircraft leasing gains altitude at GIFT City

March 08, 2026 4 min read Economics GS3 (Indian Economy Infrastructure Aviation Finance)
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What Happened

  • GIFT City's International Financial Services Centre (IFSC) has crossed a significant milestone, with 38 aircraft leasing entities registered and over 370 aviation assets (aircraft, helicopters, engines) leased from the platform — valued at approximately US$5.8 billion as of December 2025.
  • Several global aircraft lessors have set up operations at GIFT IFSC, attracted by a 20-year tax holiday framework, a 15% post-holiday concessional tax rate, and capital gains exemptions that make the jurisdiction broadly comparable to Dublin — the world's dominant aircraft leasing centre.
  • Indian banks have financed over US$615 million in aviation transactions from the GIFT IFSC zone, signalling domestic financial deepening alongside the influx of foreign lessors.
  • The Union Budget 2026 reinforced long-term regulatory certainty by formalising the extended tax horizon for IFSC-based leasing structures, further boosting investor confidence.
  • Indian airlines are beginning to establish their own leasing arms within GIFT IFSC, potentially allowing them to repatriate leasing fees that currently flow to Ireland, Cayman Islands, and other offshore jurisdictions.

Static Topic Bridges

GIFT City and IFSCA — Regulatory Framework

Gujarat International Finance Tec-City (GIFT City), located near Gandhinagar, Gujarat, is India's first and only operational International Financial Services Centre. It functions as a special economic zone for financial services, with the International Financial Services Centres Authority (IFSCA) serving as its unified regulator under the IFSCA Act, 2019. The IFSCA consolidates the regulatory functions that would otherwise fall under RBI, SEBI, IRDAI, and PFRDA for financial entities operating within the IFSC. This single-window regulatory model is designed to reduce compliance complexity for global financial firms.

  • GIFT IFSC is modelled on global IFSCs like Dubai (DIFC), Singapore (MAS jurisdiction), and London.
  • IFSCA Act, 2019 created IFSCA as a statutory authority under the Ministry of Finance.
  • Tax benefits: 100% tax exemption on business profits for any 10 consecutive years within the first 15 years of operation; reduced MAT at 9% for IFSC units.
  • Transactions within GIFT IFSC are conducted in foreign currencies, not Indian rupees, giving firms access to global capital markets from within India.

Connection to this news: The IFSCA's aircraft leasing framework — with streamlined registration, operational leases, financial leases, and hybrid lease structures — is the regulatory backbone that has enabled GIFT IFSC to attract 38 lessors in a relatively short period.

India's Aircraft Leasing Market — Strategic Context

India is one of the fastest-growing aviation markets globally, with domestic airlines collectively operating over 700 aircraft (as of early 2026) and having placed orders for more than 1,700 additional planes. Historically, virtually all aircraft used by Indian carriers have been leased from entities based in Ireland, Cayman Islands, or other offshore jurisdictions. This means lease rentals — estimated at US$1.5-2 billion annually — flow out of India. Bringing leasing onshore to GIFT IFSC would plug this outflow and build domestic aviation finance capabilities.

  • Ireland (specifically Shannon and Dublin) handles roughly 50% of global aircraft leasing.
  • Air India, IndiGo, and SpiceJet have historically leased primarily through Irish-registered special purpose vehicles (SPVs).
  • The Cape Town Convention on aircraft asset financing — to which India is a signatory — provides a global legal framework for cross-border aircraft leasing and lender protections.

Connection to this news: GIFT IFSC's growth in aircraft leasing directly addresses the historic leakage of aviation finance revenues to offshore centres, while creating a domestic hub that can serve not just Indian but also regional airlines.

Aviation Sector Growth and FDI Policy

India's civil aviation sector has seen dramatic expansion — the country is now the third-largest domestic aviation market by passengers after the US and China. The government's UDAN (Ude Desh ka Aam Naagrik) scheme aims to expand regional connectivity to underserved airports, further driving aircraft demand. FDI up to 100% is permitted in the aviation sector under the automatic route (for non-scheduled air transport services), and up to 49% for scheduled air transport services. This policy landscape, combined with GIFT IFSC incentives, is positioning India as an aviation finance hub.

  • India's aviation market: 200+ million domestic passengers per year (FY25 estimate).
  • Order book: Indian carriers have placed orders for ~1,700+ aircraft with Airbus and Boeing.
  • UDAN scheme: 4 phases launched; 579 routes awarded, 88+ airports connected.
  • 100 New Airports Mission targets commissioning of 100 new airports by 2047.

Connection to this news: The massive aircraft order book translates directly into demand for aircraft leasing and financing services — making GIFT IFSC's positioning timely and commercially significant.

Key Facts & Data

  • GIFT IFSC aircraft lessors registered: 38 entities (December 2025)
  • Aviation assets leased from GIFT IFSC: 370+ (aircraft, helicopters, engines, AGSE)
  • Total value of leased assets: ~US$5.8 billion
  • Indian bank aviation financing from GIFT IFSC: over US$615 million
  • Tax benefit: 100% profit exemption for 10 consecutive years within first 15 years
  • Post-holiday concessional tax rate: 15%
  • Reduced MAT for IFSC units: 9%
  • Ireland's share of global aircraft leasing: ~50%
  • Indian aviation lease outflow estimate: US$1.5-2 billion annually (historically)
  • IFSCA established under: IFSCA Act, 2019