India's government plans to remove the constraints banks and financiers face in supporting the acquisition and leasing of aircraft, in hopes that pension funds and insurance companies participate in the financing of aircraft.
The government hopes to take in over US$200 million annually in taxes from leasing business, as there is an estimated $5 billion annual lease revenue opportunity for pension funds and insurers as Indian airlines have placed orders for 900 aircraft worth over $45 billion.
Current barriers outlines by the government are high tax rate, levying of GST at multiple points of transaction, and General Anti-avoidance Rules.
The ministry of civil aviation is looking at alternative financing models for Indian rupee/US dollar financing after holding discussions with Non Banking Financial Companies, Pension Funds, mutual funds, High Net Worth Individual, et al.
Foreign funds may also be routed via international finance centers, like Gujarat International Finance Tec-City.
Further discussion on the issue is planned in the coming weeks.