India is considering extending the tax holiday for aircraft leasing companies operating in Gujarat International Finance Tec-City (GIFT City) from 10 years to 15 years, according to people familiar with the matter. The move aims to help India capture a larger share of the global aircraft leasing market, which is currently dominated by Ireland. Leasing firms at GIFT City presently enjoy a 10-year profit tax waiver. Extending this by five years would make the hub more attractive to global lessors, who typically earn the bulk of their profits in the later stages of an aircraft’s lifecycle, when depreciation costs are minimal. Profit margins are typically around 1 per cent in the early years but can rise to as high as 40 per cent later, the people said. As of 31 January, 33 aircraft lessors were registered in GIFT City, with more than 60 aircraft and engines leased through them, according to a KPMG report. The proposed reform is expected to be included in India’s Budget announcements in February and is designed to strengthen the country’s presence in the USD 187 billion global aircraft leasing market. Ireland currently manages roughly half of the world’s leased aircraft, while China, Singapore and Malaysia are also competing aggressively. India’s domestic aircraft leasing market remains relatively small at about USD 4.7 billion in 2023, but is expanding at 11.8 per cent annually, reported Cognitive Market Research. Neither India’s aviation ministry nor the Press Information Bureau responded to requests for comment on the proposed tax extension. The initiative follows recent progress in attracting major global financial institutions — including Mitsubishi UFJ Financial Group and HSBC Holdings — to GIFT City through targeted tax incentives. The extension would benefit leasing arms of major Indian airlines, including InterGlobe Aviation Financial Services IFSC Pvt. (linked to IndiGo) and AI Fleet Services IFSC Ltd. (Air India). Akasa Air has also applied for clearance to establish a leasing unit in the low-tax zone. Several global players stand to gain as well. Subsidiaries of firms such as Rolls-Royce’s RRPF Engine Leasing (India) IFSC Pvt., CRJ Aviation Leasing (IFSC) Pvt., and Willis Lease Finance India IFSC Pvt. are already registered at GIFT City.