India’s aircraft leasing industry has flagged difficulty in acquiring specialised talent, “intense tax scrutiny” and lack of dedicated aviation financing as key challenges facing the aircraft leasing ecosystem in Gujarat’s GIFT City.

Airlines and leasing executives who participated in the ‘Aircraft Leasing and Financing Summit 2.0’ held at GIFT City urged the government to consider employee tax incentives, housing support and even a dedicated aviation financing fund to help GIFT City compete with established global leasing centres such as Ireland and Dubai.

A report released by KPMG India at the summit warned that talent availability could emerge as the “critical success factor” for India’s aircraft leasing ambitions, stating that a global leasing hub requires “technical asset managers, engine specialists, remarketing expertise and legal depth”. The report recommended “targeted measures” to attract and retain global aviation finance professionals in GIFT IFSC, including competitive personal taxation and easier professional mobility. It also called for faster development of residential and social infrastructure in GIFT City to support relocation of international talent.

Krishan Bhargava, CEO of InterGlobe Aviation Financial Services IFSC -- the leasing arm of Indigo Airlines --- while speaking in the presence of Union Civil Aviation minister Kinjarapu Rammohan Naidu and IFSCA officials on Friday said, “There are certain challenges that need to be addressed. The first and the important one is that talent acquisition is a very difficult task in GIFT City. There should be some incentives to the employees of GIFT City -- maybe in terms of reduced income tax or incentive in housing, education or club membership --- should be considered to attract the talent. It is very difficult to get the specialized talent in GIFT City.”

Bhargava also raised concerns around taxation issues faced by aircraft lessors operating in India. “On the lessor point of view there is intense tax scrutiny and litigation in India against aircraft lessor,” he said, adding that the “confidence” among lessors is missing due to tax notices.

He further said the absence of objective criteria around applicability of General Anti-Avoidance Rules (GAAR) creates uncertainty for global leasing companies. “There is no objective criteria for applicability of GARR. Some objective criteria should be decided --- in terms of expense, strength of employees --- so that in future there should not be any questions asked by the tax authorities on GAAR,” Bhargava said.

He also called for India to strengthen its double taxation avoidance treaty network to make leasing from India more competitive globally. “The double taxation avoidance agreement between India and other countries. Today Ireland it has double taxation avoidance agreementS with many countries which makes it easier to lease the asset out of Ireland and same should be considered for India,” he said.

Abhijit Menon, Divisional Vice-President (Commercial) at Air India, said the aviation industry is seeking a more stable tax environment, particularly regarding GAAR provisions and double taxation treaties. He also emphasised the need for better access to financing, including the expansion of Indian Rupee-based funding both within GIFT City and the domestic market. According to Menon, treating aircraft financing as part of the infrastructure sector could encourage greater participation from Indian banks in aircraft trade finance.

The KPMG report also recommended amending the Banking Regulation Act and RBI regulations to explicitly permit aircraft leasing as an authorised banking activity for banks. Other recommendations included extending IFSC-linked tax incentives to MRO and component repair activities, enabling direct customs clearance of aircraft parts within IFSC, and allowing seamless transfer of aircraft ownership between IFSC-based lessors without requiring physical export and re-import of aircraft.

Published on May 9, 2026