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Two global aircraft financing and leasing companies, and two domestic aviation-related firms will be setting up aircraft leasing arms at the International Financial Services Centre (IFSC) in Gujarat’s GIFT City, civil aviation secretary Pradeep Singh Kharola said on Friday.

Speaking at an aircraft leasing conference in New Delhi, Kharola named the foreign companies as Ireland-based Acumen Aviation, and London-based Investec Aviation Finance, and the domestic companies as aviation consultancy and asset management firm Vman Aero, and private jet aggregator JetSetGo Aviation Services Pvt. Ltd.

This year’s budget provides for incentives and tax holidays on capital gains for aircraft leasing companies setting shop at GIFT City. “Aircraft financing is also the most profitable segment of the aviation value chain. Currently, foreign financiers and lessors are the biggest beneficiaries of India’s growing aviation strength," Kharola said.

“Unfortunately not a single aircraft has been leased from within India so far," he said, adding that India has created a highly efficient system of aircraft leasing comparable to those in Ireland, China, Hong Kong and Singapore.

Mint had on 12 February reported that several state-owned banks, including the State Bank of India (SBI), are in talks with the government to set up aircraft leasing arms at the IFSC.

On Friday, civil aviation ministry’s senior economic adviser Vandana Agarwal said aircraft lessors at IFSC will enjoy benefits like 10-year tax holidays, waiver of capital gain taxes on aircraft disposal during the tax holiday period, and waiver of basic custom duty, stamp duty and withholding tax on interest payments on royalty for non-residents. Indian PSBs like the State Bank of India are also keen to be active participants, she added.

Agarwal said that while the total value of India’s commercial jet (aircraft) backlog is $19.32 billion, order books from Indian airlines are the third largest in the world at 1,028 in volume.

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