SpiceJet and HAL are among six companies looking to open aircraft leasing services in India, with their base in GIFT City in Ahmedabad.
The four other companies are - Acumen Aviation, VMan Aero, Investec and JetSetGo, Pradeep Singh Kharola, Secretary, Ministry of Civil Aviation, Government of India, said during an industry event in Delhi on February 26.
Finance Minister Nirmala Sitharaman in her Budget 2021 speech on February 1 proposed a tax exemption for aircraft leasing companies, a move that was expected to help India getting its first player in this aviation segment.
Till now, the Indian aviation industry has been dominated by lessors from Ireland and Hong Kong. Currently, it's 48 percent more expensive to do this from India than from Ireland.
While Acumen is headquartered in Ireland, Investec is based in London. Both are among the bigger aircraft leasing companies in the world.
Kharola said SpiceJet is considering to lease seaplanes through GIFT City. It had started seaplane operations in 2020, but had suspended after forced to send the aircraft to Maldives for maintenance.
Later in the day, SpiceJet Chairman and Managing Director Ajay Singh said the airline will eventually look to set up its own leasing unit in GIFT City.
HAL is setting up a leasing unit for the Dornier aircraft. VMan is based in Mumbai. JetSetGo is a private charter player.
Though among the fastest growing aviation markets in the world, and with the second largest aircraft order book in the world, India has never had a leasing company.
While India has an order book of 1,028 aircraft, China has 1,037.
In the US, 70 percent of the aircraft are leased within the country. It is 60 percent in China. But in India, most of the airlines prefer to go to Ireland or Hong Kong to lease aircraft as these places have a tax structure that makes leasing cheaper.
The total vale of commercial jet backlog of orders from India, stands at $19.32 billion.
SBI, NIIF, others show interest
Vandana Aggarwal, Senior Economic Adviser, Ministry of Civil Aviation, Government of India, added that the National Investment and Infrastructure Fund, the country's sovereign fund, has indicated making a presence in aircraft leasing.
Also, SBI, the country's largest bank, and ICICI Lombard, a leading general insurance company, have also "shown interest," she said.
(This is a developing story. Please check back for updates)