Aircraft Leasing - IFSCA Registration, Cape Town and DGCA
What this domain tests
Aircraft leasing tests IFSCA's aircraft lessor framework, the Cape Town Convention remedies that make GIFT-IFSC attractive, and the interaction with DGCA registration and tax incentives.
Core rules
- An aircraft lessor - Indian company, LLP or a foreign entity's branch - registers with IFSCA; a pure lessor needs no RBI NBFC licence.
- Permitted business: operating and finance leases of aircraft, helicopters and engines, to Indian carriers and foreign operators, including sale-and-leaseback and portfolio acquisition.
- India is a party to the Cape Town Convention and Aircraft Protocol; lessors record an international interest in the International Registry and obtain an IDERA (Irrevocable De-Registration and Export Request Authorisation) so that on default the aircraft can be de-registered and exported quickly.
- Where the aircraft is registered in India, DGCA registration is still required, with the lessor as owner and the airline as operator; IFSCA registration does not replace it.
- IFSC units get a 100% profit-linked deduction for ten consecutive years under section 80LA, and rentals are denominated in foreign currency, reducing FX mismatch.
Worked example
A lessor buys a used narrowbody for USD 30 million and leases it for six years at USD 300,000 a month to an Indian low-cost carrier. It registers with IFSCA, records the international interest in the Cape Town registry, takes an IDERA from the airline before delivery, and the aircraft is registered with DGCA. On default, the IDERA is the operative document that lets the lessor export the asset quickly - the security package matters more than the headline rental.
Traps that cost marks
Assuming IFSCA registration substitutes for DGCA or Cape Town formalities; assuming Indian-flag registration is compulsory (leasing to foreign carriers is allowed); forgetting to take the IDERA before delivery; assuming leasing needs an NBFC licence.