GIFT City MD and group CEO, Sanjay Kaul’s latest bold statement of ambition has sent a message of confidence and looming transformation in the Indian skies with potential for global impact.
“Currently, about 800–900 aircraft are being operated in India. Among the three major airlines, close to 2,200 aircraft are on order. Aircraft are flying in one place, while financing is happening elsewhere. Why shouldn’t that financing happen in India? As a first step, we want to bring that business to India through GIFT City. Gradually, leasing activities currently undertaken in countries such as Ireland, the UAE, and Singapore will also be carried out from India,” he said.
His emphatic statement was a declaration of intent to change the status quo. For decades, the Indian aviation sector has operated under a striking economic paradox: while its skies are filled with some of the fastest-growing passenger volumes in the world, the capital driving this growth has remained resolutely offshore. Historically, Indian airlines flew local routes while their aircraft were financed and leased out of global hubs like Dublin, Singapore, or Dubai.
However, a quiet structural revolution is unfolding at the Gujarat International Finance Tec-City (GIFT City). According to recent reports, the International Financial Services Centre (IFSC) is rapidly capturing a significant share of the global aircraft leasing market—valued at an estimated $187billion in 2025. Today, GIFT City boasts a burgeoning portfolio of approximately 40 lessors managing more than 220 aircraft and engines. This is just the beginning of a profound transformation.
The Pillars of Regulatory Maturity
Two major catalysts are driving this transition from a localized experiment to a globally competitive leasing hub:
- The Formalization of the Cape Town Convention: Historically, global lessors viewed India with caution due to legal ambiguities surrounding asset reclamation. The passage of the Protection of Interests in Aircraft Objects Act earlier this year has institutionalized the Cape Town Convention. By giving international lessors a robust, clear legal pathway to reclaim assets in the event of default, India has eliminated its single largest sovereign risk premium.
- Structural Financial Innovation: The International Financial Services Centres Authority (IFSCA) has introduced a sophisticated regulatory framework that structurally decouples lessors from lenders. By leveraging Special Purpose Vehicles (SPVs) managed by Trust and Company Service Providers (TCSPs), GIFT City now offers the exact transaction flexibility, tax neutrality, and bankruptcy remoteness that international financiers expect.
The Onshoring Wave and Global Ambitions
The domestic market opportunity is staggering. India currently operates a civil fleet of 800-900 aircraft, but major carriers have a massive backlog of nearly 2,200 aircraft on order. By anchoring the leasing and financing of these incoming fleets domestically, India can prevent billions of dollars in capital flight, lower operational costs for local airlines, and build a highly skilled financial services ecosystem onshore.
Moreover, forward-looking leasing entities are already capitalising on this shift. Pioneers like Skypulse are actively contributing to this ecosystem’s maturation. By setting up dedicated leasing structures and utilising the newly established SPV frameworks, Skypulse and similar players are proving that GIFT City can match Dublin’s execution speed and tax efficiency.
The Path Forward
GIFT City’s ultimate ambition goes beyond mere import substitution. As its ecosystem matures, the cost of capital inside the IFSC will converge with global standards. Backed by a strong legal framework and innovative SPV structures, India is uniquely positioned to transition from an importer of aviation credit to a global exporter.
As leasing entities like Skypulse continue to scale their operations out of Gujarat, the world’s aviation financiers are realising that the centre of gravity in aircraft leasing is shifting eastward. The era of flying in India while financing in Europe is drawing to a close.