Aircraft Leasing Gains Altitude at GIFT City

Why It Matters

The rapid expansion positions GIFT City as a competitive global aircraft leasing hub, diversifying India's aviation financing and attracting long‑term institutional capital.

Key Takeaways

• Aircraft leases tripled to 196 units in one year
• Lease portfolio value reaches $6.9 billion
• IFSC banks provided $615 million aviation financing
• Regulatory reforms enable tax holiday and customs exemptions
• Limited international scale and bankruptcy‑remote structures remain challenges

Pulse Analysis

The aircraft leasing market has traditionally been dominated by Dublin, Singapore and the United States, but GIFT City’s International Financial Services Centre is rapidly closing the gap. Between December 2024 and December 2025 the number of aircraft under lease more than tripled to 196, pushing the portfolio value past $6.8 billion. This growth reflects India’s soaring domestic air travel demand and the strategic decision of airlines to source financing locally. By routing deals through the IFSC, lessors gain access to a deep pool of dollar liquidity while staying close to their primary market.

Regulatory agility has been the catalyst behind the surge. The IFSCA introduced tax holidays for IFSC entities, exempted GST and customs duties on aircraft imports, and aligned Indian law with the Cape Town Convention through the 2025 Protection of Interests in Aircraft Objects Act. These measures lower transaction costs and provide legal certainty for cross‑border repossession and export. Simultaneously, a growing cadre of global and regional banks has set up Indian Financial Services Centre banking units, delivering $615 million in syndicated and export‑credit‑agency‑backed loans. The result is a shift from pure lease intermediation to structured portfolio financing and balance‑sheet ownership.

Despite the momentum, GIFT’s leasing ecosystem remains heavily domestic and lacks mature bankruptcy‑remote structures that international investors demand. Expanding the pool of experienced Indian banks, developing secondary‑market liquidity, and building a robust legal framework for asset‑backed securities are essential next steps. If these gaps are addressed, GIFT City could attract larger aircraft types, increase its share of global leasing volumes, and become a conduit for long‑term institutional capital into India’s aviation sector. The trajectory suggests that the city is moving from experimental to institutionalized leasing, reshaping the country’s financing landscape.