Neelam Mathews

Increased demand for private aviation in India’s burgeoning economy has made the case for reforming the sector’s regulatory structure even more urgent, according to industry leaders who gathered for the annual conference of the country’s Business Aviation Operators Association (BAOA) in Delhi held in March. Speakers highlighted key challenges as including unhelpful tax rules that impede progress, a lack of regulation for new services such as fractional ownership, and inadequate provision for training, pilot recruitment, and maintenance.
At face value, India’s business aviation market should be booming, based on an impressive economic growth trajectory that the International Monetary Fund expects to see GDP exceeding Japan’s $4.4 trillion by year-end. On that basis, it is set to overtake Germany in 2027 to become the world’s third-largest economy.
As of 2024, there were already 13,600 ultra-high-net-worth individuals in India last year when that total grew by 6%, and with that rate expected to reach 50% growth by 2028. According to the Knight Frank Wealth Report, the number of high-net-worth individuals globally will double from around 850,000 to 1.65 million by 2027.
Many of these individuals would be likely customers for charter flights, for which operators are required to secure a nonscheduled operator's permit (NSOP). Due mainly to what BAOA officials view as tax anomalies, significant numbers of privately-owned aircraft in India are also registered under NSOPs under names that tend to obscure the ownership trail.
<h2>Calls For Tax and Regulatory Reform</h2>
The main factor is that the importation of aircraft for private use is subject to a 28% tax, while those bought for charter service incur a lower rate of 5%. Some of the private aircraft operated under NSOPs are registered as being contracted for “support services” that include supporting trips to meetings or moving executives between factory sites.
According to BAOA’s managing director, RK Bali, India needs to rationalize its current tally of 122 NSOP holders, which collectively have a 434-strong fleet including 34 different aircraft types. In his view, fractional ownership would re-energize the country’s business aviation sector by providing customers with more cost-effective investment options and reverse a trend in which airline growth is outstripping that of the business aviation sector.
However, Asanga Chuba Ao, who is joint secretary at the Ministry of Civil Aviation, implied that this transition could take some time. “It is work in action. Fractional ownership must be customized and aligned to the tax regime of India,” he told AIN, referring to the apparently complex ongoing discussions with the country’s finance ministry.
According to speakers at the Delhi conference, the past five years have seen strong demand for the latest midsize and long-range business jets. Some companies now have large and varied fleets, such as Reliance Industries, which has a net worth of around $200 billion and operates 13 business jets based in Mumbai. The company is planning to add up to eight more aircraft to add to assets that already include an Airbus Corporate Jet, a Boeing Business Jet, a Bombardier Global Express, and several Embraer ERJs, Dassault Falcons, and a Sikorsky helicopter.
Another significant NSOP operator is India Flysafe Aviation, which is owned by Naveen Jindal, a member of the Indian parliament and chairman of Jindal Steel &amp; Power, with a net worth estimated at $7.7 billion. The company’s fleet includes a Global Express, a Cessna Citation 560XL and Grand Caravan, a Pilatus PC-12 NG, and a Leonardo AW139 helicopter.
<h2>Operators Want More Flexibility and Infrastructure</h2>
“We recognise the Directorate General of Civil Aviation’s obsession with safety, but it is super conservative,” Jindal told AIN. He argued that Indian business aviation needs more flexible access to airports, plus greater leeway over VFR operations in some conditions. He added that there is also insufficient local support capacity for tasks such as engine overhaul and aircraft painting.
Several delegates at the BAOA conference said that lack of dedicated business aviation terminals and ramp space has continued to inhibit the sector’s growth. However, a new FBO at Cochin International Airport in Kerala state now claims to be the fourth largest facility in India behind the established operations in Delhi, Mumbai, and Ahmedabad.
<figure role="group" class="caption caption-img">
<img alt="FBO at Cochin International Airport" data-entity-type="file" data-entity-uuid="a231b7a4-7ded-4e3d-81dd-9d56c9158b7b" src="/sites/default/files/inline-images/FBO%20at%20Cochin%20International%20Airport%201.png" width="760" height="800" loading="lazy">
<figcaption>There is a new FBO at Cochin International Airport in India's Kerala state.</figcaption>
</figure>

Some companies also resent what they view as unfairly protectionist restrictions on market access. They maintain it is restricting choice for private aviation consumers.
“Foreign operators in India face restrictions as they are not allowed to conduct cabotage operations, which means they cannot pick up and drop off passengers within India on the same flight,” said Caroline Cresp, managing director of Dubai-based charter operator LunaJets. “This rule ensures domestic air travel remains the domain of Indian operators.”
However, Arun Kashyap, director with Indian operator Fly Sirius, said the policy to limit market access rights to foreign companies is good for the domestic industry. The company, which is partnered with Airavat Aviation to operate a preowned Hawker 4000 jet, has plans to add up to another 20 aircraft to its fleet by 2028. “The investment is low, the potential is high as people have money and value time,” he commented.
Aircraft purchases in India are largely funded by private banks, but the country is now getting more attention from international asset-based finance providers. Some buyers are finding ways to circumvent high import levies by opting for lease terms available through the government-backed Gujarat International Finance Tec-City zone, which offers 10-year breaks on taxes.
Despite the addition of more than 50 helicopters over the past three years, India’s 200-strong rotorcraft fleet remains small in relative terms compared with much smaller neighboring countries. DGCA joint director general Manish Kumar told the BAOA conference the agency is focused on improving operational safety and vertiport procedures to support the anticipated arrival of another 500 aircraft over the next 20 years.
According to Sudhir Agarwal, president and CEO of Jubilant Enpro, which operates several Bell helicopter models, there is scope for rotorcraft to be operated on a fractional ownership basis. In his view, end users, including healthcare organizations, energy and tourist ventures, will not want to own the aircraft directly.

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