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Civil Aviation Minister Hardeep Singh Puri on Friday said that India must leverage its growing air traffic to establish a robust aircraft leasing industry, which would finance new aircraft deliveries through its own policies and products.

Addressing the 'India Aircraft Leasing Summit 2021- Rupee Raftaar', he said that it is vital to develop this new line of business in India for financial services and add India on the map of global financial centres.

The event was also attended by Union Finance Minister Nirmala Sitharaman, who was the chief guest.

Puri said that Covid-19 pandemic has stagnated economic activities globally, but the Indian aviation sector has shown resilience, recalibration and resurgence despite the cascading impact of various aspects of world trade.

The Indian aviation sector is on a path to recovery and has exhibited significant recovery to pre-Covid levels in terms of passenger movement and cargo operations, he said, adding that concerted efforts are being made to attract new business into India, such as through aircraft leasing, financing, and MRO operations.

Puri noted that commensurate with the growth potential of Indian aviation sector, in the next 20 years, India will need 1,750-2,100 aircraft valued at over Rs 20.40 lakh crore, with an estimated 100 deliveries each year.

He also noted that the share of aircraft on lease globally has increased dramatically over the last few decades, escalating from 2 per cent in 1980 to over 41 per cent in 2018 and estimated to have reached 50 per cent in 2020.

He said that the Rupee Raftaar working group on aircraft leasing and financing therefore has holistically taken the 360-degree review of existing and foreseeable barriers to aircraft financing by local financiers in India after extensive consultations with RBI, banks, NBFCs, asset financing or leasing companies, airlines, airports, among others.