Despite India being the third[1] largest domestic aviation market in the world, a majority of the aircrafts in the country (more than 70% approximately) are procured through lease arrangements, with most of them being provided by overseas lessors. Airline companies do not have the financial wherewithal to purchase aircrafts and hence, are forced to take them on lease. However, since the aircraft financing industry is at a nascent stage in India and considering the risks involved, new players are unwilling to enter the business. While leasing aircrafts helps to manage the liquidity position of aircraft operating companies, it comes at a heavy cost and significant financial risks for aircraft operating companies and creates huge trade imbalance for the country.Continue Reading CBDT exempts GIFT City aircraft leasing cos from withholding on dividend distributed inter se, but is it enough?