Asset Class: Aircraft acquisition being considered for infrastructure status in Budget FY27
Previous Union Budget granted infrastructure status to commercial shipping vessels, resolving any objections related to assigning such status to movable assets
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To support growth in the country’s aviation sector, the Union Budget for the financial year 2026–27 may consider granting infrastructure status to aircraft under the asset category.
Speaking tobusinessline, industry sources said that the proposal had faced objections in the past related to assigning such status to aircraft, which is a movable object.
However, they pointed out that in the previous Union Budget infrastructure status was granted to commercial shipping vessels, resolving these objections related to assigning infrastructure status to movable assets.
As per sources, this development has led to renewed interest within the aviation sector for a similar designation for commercial aircraft.
If implemented, this proposal could address airlines’ financing requirements for aircraft acquisition.
Presently, more than 1,700 aircraft have been ordered by major India-based airlines.
On the other hand, smaller operators ans well ans new and upcoming airlines are facing challenges in acquiring aircraft through leasing arrangements.
In this context, some players are considering outright purchases of aircraft; but, high interest rates and reluctance within the domestic banking sector have constrained such plans.
Besides, the infrastructure tag would enable airlines to seek loans for aircraft acquisition at lower rates under the Priority Sector Lending (PSL) scheme.
The PSL framework is regulated by the Reserve Bank of India (RBI) and mandates banks to allocate a portion of lending to identified sectors.
According to sources, the Centre is keen to improve access to credit for the aviation industry, particularly for airlines operating small-capacity aircraft.
Notably, infrastructure classification of aircraft loans would allow airlines to access financing from a broader range of lenders.
The move is expected to be relevant for start-up airlines and may encourage banks to increase exposure to the sector.
Furthermore, industry insiders said the framework could include guidelines requiring Indian-owned aircraft to be on the regulator’s registry and governed by domestic laws, providing clarity on jurisdiction and repossession in case of defaults.
Industry executives stated that infrastructure classification could support a transition from operating leases to finance leases, while addressing concerns related to domestic lending hesitancy and interest rates.
Consequently, eligibility under PSL norms could help align financing structures.
They added that rupee-denominated loans for aircraft purchases could reduce foreign exchange outflows as fleet inductions rise.
Additionally, infrastructure classification could open participation from insurance companies and allow banks to extend longer repayment tenures.
Experts further suggested expanding the scope beyond commercial aircraft to include twin-engine helicopters used in offshore oil and gas, mining, and exploration activities, along with business and corporate jets operated by core infrastructure companies.
They said aircraft and helicopter financing should follow a universal framework rather than being limited to government special purpose vehicles such as Gujarat International Finance Tec-City (GIFT City).
At present, India has more than 800 commercial aircraft in service.
Published on January 18, 2026
