Will the 2026-27 Union Budget grant infrastructure status to aircraft in India?

The Union Budget for 2026-27 is considering granting infrastructure status to aircraft to support the aviation sector's growth and financing needs.

How will infrastructure status help Indian airlines finance aircraft?

Infrastructure status could allow airlines to access loans at lower interest rates through the Priority Sector Lending (PSL) scheme.

What challenges do smaller Indian airlines face in acquiring aircraft?

Smaller airlines are facing difficulties with leasing arrangements and are constrained by high interest rates and domestic banking hesitancy for outright purchases.

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Aviation Gets Infrastructure Tag Boost?

18 Jan

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Summary

Aircraft may get infrastructure status in Union Budget 2026-27.
Airlines face high interest rates and lender reluctance for purchases.
Infrastructure status could lower loan rates via Priority Sector Lending.

The upcoming Union Budget for the financial year 2026-27 is reportedly considering granting infrastructure status to aircraft as an asset category. This potential move aims to stimulate growth within India's aviation sector by easing aircraft acquisition financing for airlines. With over 1,700 aircraft on order by major Indian carriers, smaller operators are particularly struggling with leasing and outright purchase challenges due to high interest rates and domestic banking sector hesitations.

Granting aircraft infrastructure status would allow airlines to leverage the Priority Sector Lending (PSL) framework, regulated by the Reserve Bank of India. This could enable them to secure loans for aircraft acquisition at reduced interest rates. The previous Union Budget's decision to accord infrastructure status to commercial shipping vessels has paved the way for similar consideration for movable assets like aircraft, signaling a positive shift in policy perception.