Axis Bank, the fifth Indian Bank by market capitalization of $ 40 billion, last month became the first Indian bank to execute a plane rental agreement, for 34 dragging aircraft for Air India.
The agreement also marks an important step for the financing of Indian aviation: the first transaction in which all stakeholders – lender, borrower, law firm (tont), agent of installations and security agent – worked through their entities based in Gujarat International Finance Tec -City (Gift City), the new International Center for Financial Services of India (IFSC).
Indian airlines have generally been based on multinational banks and foreign lenders for aircraft leases, mainly transported by Dublin, Ireland, due to the lack of solid domestic financing framework. It changes.
Air India, thanks to its rental entity recorded in Gift City, AI Fleet Services, concluded eight rental transactions worth $ 1 billion, especially with international lenders for Airbus A350. The March Agreement for Trainer planes was made exclusively with an Indian lender, extending the long -term tenor labeled in US dollars. Interglobe Aviation Financial Services IFSC, the City Gift of Indigo Airlines branch, has already financed 20 Airbus A321neos for $ 1.8 billion through international lenders and plans to send few other planes via IFSC.
The Indian government is pushing the use of Gift City as a financial hub for cross -border transactions for all sectors, but especially aviation in the form of long -term aircraft leases. Gift City offers a favorable tax regime for national and international financiers and a solid regulatory framework, including a new law which allows a faster resumption of possession of planes failing.
Indian airlines have ordered a total of 1,600 aircraft worth $ 100 billion, to be delivered over the next 10 years, which Indian banks want to finance. The government promises to facilitate national and foreign banks that structure and finance Gift City leases and have identified $ 30 billion in funding for modernization and expansion of fleet.
Following the axis bank agreement, several other Indian banks also pointed out their interest in entering space.