The government’s plan of projecting India as a hub of aircraft leasing is about to get a big boost, with India’s largest airlines, IndiGo and Air India, setting up leasing arms at GIFT City, Gujarat. IndiGo, which has around 1,000 aircraft on its order book, that the airline will set up a leasing unit for financing its aircraft by investing Rs 30 crore. The company will also issue a corporate guarantee of up to $996 million for payment obligations of the company. IndiGo is likely to lease around 10 Airbus A320 Neo through the leasing arm in the first lot.

Tata-owned Air India has already established an aircraft leasing unit in the special economic zone known as IFSC Gift City. The carrier's six A350-900s, due to start arriving later this year, will arrive under the company called AI Fleet Services IFSC Limited financial lease. Air India placed an order for 470 aircraft earlier this year, sourced from Boeing and Airbus. The company has an authorized capital of Rs 50 crore and a paid-up capital of Rs 300 million.

The government wants to develop GIFT City as a global leasing hub on the lines of Dubai, Ireland, and Singapore. Multiple financial benefits, including tax breaks like waiver of Goods and Services Tax (GST) and Capital Gain Tax, have been announced by Finance Minister Nirmala Stitharaman to attract global players. Dipesh Shah, executive director of development, said that with big airlines like IndiGo and Air India setting up leasing units, this will push the SEZ’s image among global players. Till now, GIFT City has been able to execute leases of 109 smaller aircraft and helicopters through the Special Economic Zone. "GIFT IFSC provides a level playing field for undertaking aircraft leasing services," he said. " The steps of IndiGo and Air India push other airlines to follow suit," said Shah.