Gujarat International Finance Tec-City (GIFT City) was established in 2007 as India’s first operational smart city and an emerging global financial and IT services hub located in Gandhinagar, Gujarat. GIFT City is a personal project of Prime Minister Narendra Modi and is intended to be a centre for foreign investors to transact in Indian securities with minimal tax and bureaucracy. GIFT City allows non-Indian nationals to become corporate inhabitants and firms such as the Abu Dhabi Investment Authority (the UAE’s largest sovereign wealth fund), JP Morgan Chase, MUFG and Bank of America have all set up entities in GIFT City.
As a result of reforms introduced in India in 2020, aircraft leasing is now recognized as a financial product. Entities in GIFT City are now able to finance and lease aircraft with the added flexibility to transact in foreign currency. This reform has led to the development of the aviation sector in GIFT City, and helicopter lessors such as Vman Aviation and business jet lessors such as ModAir Aviation, and commercial airlines such as IndiGo and Air India, have established presences in GIFT City. Having two Indian airlines commit to establishing leasing entities in GIFT City has been seen as a key developmental milestone in India for the government, which has been keen to attract aircraft leasing businesses within India given the success of centres such as Dublin and Singapore.
This year, there have been significant transactions structured through GIFT City including TATA-owned Air India securing the first of six Airbus A350-900 aircraft scheduled to join its fleet through its aircraft leasing entity in GIFT City. In June 2023, IndiGo ordered 500 new aircraft, the biggest aircraft order ever made, and is understood to be planning to receive its first aircraft through its aircraft leasing entity in GIFT City.
Click on the below document to read the full article published in VedderPrice - Global Transportation Finance Newsletter December issue, co-authored by our partner, Lovejeet Singh.