Advancing the aircraft leasing ecosystem in India - From reforms to powering future growth

India’s aircraft leasing and financing ecosystem has made significant progress, supported by regulatory reforms, a competitive tax framework, and growing market activity. With Indian airlines placing one of the largest aircraft orders globally and a projected leasing market of nearly USD100 billion, the sector presents a strong opportunity for domestic value creation. However, as leasing demand continues to be largely met by foreign lessors, strengthening domestic financing capabilities will be key to reducing foreign exchange outflows and enhancing strategic resilience.

This report provides an overview on the situation of commercial aircraft leasing in India, and the future potential of aircraft leasing. The report highlights the relevance of GIFT IFSC for aircraft leasing from India perspective, significant potential for growth in this sector, fiscal and non-fiscal measures taken so far for developing a robust leasing framework to support the growth of India’s aviation industry.

Key highlights of the report

Relevance of aircraft leasing

Aircraft leasing has emerged as one of the most strategically significant segments of global finance. Capital intensive by nature and embedded deeply within international financial markets, leasing is no longer a mere financing mechanism. It has evolved into a determinant of airline competitiveness, fleet modernisation, and balance sheet resilience. India represents one of the fastest growing aviation markets in the world, with sustained passenger growth and unprecedented fleet expansion plans. Yet, for decades, the financial value generated by this growth accrued largely outside the country
Gujarat International Finance Tec City (GIFT IFSC) structural intervention

The emergence of aircraft leasing within GIFT IFSC marks a structural shift in India’s aviation finance architecture. Crucially, GIFT IFSC was conceived not as a sector specific incentive zone, but as a systemic financial reform. Designed as a deemed offshore jurisdiction within India, it enables capital mobility, regulatory certainty, and global market access while retaining legal sovereignty. Recognising the central role of aircraft leasing in sustaining airline growth, reducing capital costs and anchoring long‑term financial capability within the country, the Government of India has undertaken a series of coordinated fiscal, regulatory and institutional reforms to establish India as a competitive location for aircraft leasing and aviation finance. These interventions have been anchored at GIFT IFSC, which has been designated as the primary platform for aircraft leasing and financing in India
GIFT IFSC

GIFT City is a destination for domestic and international businesses seeking to establish operations in one of India’s most advanced smart cities. Conceived as a financial and technological hub, GIFT City offers infrastructure, regulatory efficiency, and a conducive business environment
Reforms announced in Union Budget 2026

The reforms announced in the Union Budget transforms GIFT IFSC from an India-focused leasing base into a competitive aviation finance jurisdiction, capable of hosting widebody leasing, engine-only platforms, and international airline portfolios. The budget 2026 reforms significantly enhance GIFT IFSC’s appeal to global capital providers. It cements GIFT IFSC as a long-term pillar of India’s aviation finance strategy. Collectively, the fiscal measures discussed in report align India’s leasing framework more closely with established global leasing hubs and materially improve the commercial viability of leasing from GIFT IFSC
Potential action points

While the IFSC at GIFT City is a commendable initiative by the government to attract lessors to India and considerable grounds have been covered in last few years, various potential action points have been discussed for further development of aircraft leasing ecosystem in GIFT IFSC

Way forward

Aircraft leasing in GIFT IFSC has crossed a critical threshold. What began as an initiative to onshore India’s leasing exposure has now evolved into a platform demonstrating structuring credibility, policy coherence, and investor confidence. Looking ahead, the next phase of growth is not likely to be measured by aircraft count alone, but by who allocates capital through GIFT IFSC and for what purpose. The real inflection could come when aircraft and engine assets leased from IFSC are routinely financed by (i) Global pension funds, banks and insurers and (ii) Asset‑backed securitisation markets. Over the next decade, GIFT IFSC could evolve into a regional and eventually global leasing node. Its success is likely to influence India’s broader financial services ambitions.

Advancing the aircraft leasing ecosystem in India - From reforms to powering future growth

Overview on the existing situation of commercial aircraft leasing in India, landmark deals, progress made and the future potential of aircraft leasing

Download the report (8.5 MB)

Key Contacts

Akhilesh Tuteja

Partner & National Leader, Clients and Markets

KPMG in India

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Sunil Badala

Partner, National Head of Tax

KPMG in India

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Jodhbir Sachdeva

Associate Partner, Aviation

KPMG in India

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