Recent developments in India's aviation and shipping sectors signal a renewed focus on bolstering maintenance, repair, and overhaul (“MRO”) activities. The Union Budget 2024-25 introduces key incentives, including extended timeframes for export of goods imported for repairs and re-import of warranty covered items. These measures, coupled with the earlier implementation of a uniform 5% integrated goods and services tax on aircraft and engine parts, underscore the government's commitment to fostering growth in these critical industries. India's position as one of the world's fastest-growing domestic aviation markets has prompted substantial aircraft orders and projections of continued expansion through 2042. The Economic Survey 2023-24 emphasizes the need for enhanced efficiency, sustainability, and connectivity within the sector. As these developments progress, industry stakeholders should closely monitor opportunities arising from infrastructure investments, skill development initiatives, and collaborative efforts between public and private entities.
We believe, these policy changes reflect the government's commitment to positioning India as a global aviation hub and MRO destination. By creating a more favourable regulatory environment, the measures are likely to attract foreign investment, enhance domestic capabilities, and potentially reduce costs for airlines operating in India.
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