India has taken a significant step to strengthen its civil aviation sector with the passage of the Protection of Interest in Aircraft Objects Bill, 2025. Passed by the Lok Sabha on April 3, 2025, after receiving approval from the Rajya Sabha, the bill represents a crucial reform under the leadership of Civil Aviation Minister Ram Mohan Naidu. This legislation is set to align India’s aircraft leasing and financing framework with international standards, further enhancing investor confidence in the country’s fast-growing aviation market.
The bill builds upon the Cape Town Convention of 2001, which India adopted in 2008 to standardize and simplify international leasing agreements. However, challenges in legal enforcement had resulted in leasing costs for Indian carriers being 8 to 10 percent higher than global averages. By addressing these gaps, the legislation aims to reduce costs, provide legal certainty for aircraft financiers, and position India as an attractive hub for aviation investments.
Speaking about the urgency of the bill, Naidu credited Prime Minister Narendra Modi for the remarkable growth seen in the aviation sector over the past decade. Highlighting the transformation, Naidu noted that annual passenger numbers more than doubled from 100 million in 2014 to 228 million in 2024. He also emphasized the rapid expansion in infrastructure, with the number of airports increasing from 74 in 2014 to 159 in 2024, with two additional airports set to be launched soon. The fleet size also saw impressive growth, rising from 340 aircraft in 2014 to over 840 by 2024.
The newly passed bill is expected to ease the leasing process for Indian airlines, enhance compliance under the Cape Town Convention, and reduce operational costs for carriers, ultimately benefiting passengers through lower fares and improved connectivity. The legislation also aims to attract new entrants to the sector, fostering competition and innovation.
Naidu also addressed broader challenges within the industry, particularly the high cost of aviation turbine fuel (ATF), which accounts for nearly 45 percent of airline operating expenses. Urging more states to reduce tax rates on ATF, he highlighted how uniformity in taxation could boost regional connectivity and make air travel more affordable.
Looking ahead, the Ministry of Civil Aviation has set ambitious goals for sustainability and capacity building. Plans include producing 2.5 million liters of sustainable aviation fuel by 2025 and transitioning over 100 airports to renewable energy. To address the growing demand for trained pilots—projected at 30,000 to 34,000 over the next 10 to 15 years—the government is ramping up efforts to increase flight training organizations and issue more commercial pilot licenses annually.
Naidu concluded by emphasizing the broader vision driving these reforms. “Civil aviation in India is not just about flying planes. It’s about connecting people, boosting economies, and creating opportunities. And we are committed to making India a global leader in aviation,” he stated.
