India is considering granting infrastructure status to aircraft in the Union Budget for Financial Year 2026-27 to ease airline financing and support sector growth.
The move allowed airlines to access lower-interest loans under the Reserve Bank of India’s Priority Sector Lending framework. The designation broadened the pool of lenders particularly benefiting start-up and small-capacity operators. Five Indian carriers held 1,741 aircraft on order according to fleet data. The proposal gained renewed interest after the government extended similar status to commercial shipping vessels.
The classification encouraged a shift from operating leases to finance leases and reduced foreign exchange outflows through rupee-denominated loans. Industry executives suggested guidelines requiring aircraft to be Indian-owned and registered domestically for clear jurisdiction and repossession rules. Some proposed extending the policy to twin-engine helicopters used in offshore operations and business jets.
The framework avoided limitation to government-run special-purpose vehicles. The change addressed challenges in aircraft acquisition through leasing arrangements.
Industry sources have told The Hindu Business Line newspaper “India may grant infrastructure status to aircraft in the Union Budget for the Financial Year 2026-27 to ease airline financing and support growth in the aviation sector.”
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