International Financial Services Centres Authority (IFSCA) has amended the ‘Framework for Aircraft Lease’ under the Finance Company Regulations, 2021, to facilitate the acquisition of assets by Lessors in IFSCs from Indian manufacturers. The revised clause O.2. introduces restrictions on acquiring aircraft or related assets if they will be used solely in India or for services to Indian residents. However, exceptions apply in cases where the acquisition is from a non-group entity, as part of a sale and leaseback arrangement for assets imported into India for the first time, or directly from an Indian manufacturer.
These amendments aim to regulate financial transactions within IFSCs while enabling certain asset purchases under specified conditions. The circular, issued under Sections 12 and 13 of the IFSCA Act, 2019, takes immediate effect. The updated Aircraft Lease Framework is available on the IFSCA website.
International Financial Services Centres Authority
Circular No. F. No. 172/IFSCA/Finance Company Regulations/2024-25/02 Dated: February 26, 2025
To,
All Finance Company / Finance Unit registered in the International Financial Services Centres (IFSCs)
Subject: Amendment to the ‘Framework for Aircraft Lease’ with regard to transactions with person (s) resident in India.
1. Reference is drawn to the International Financial Services Centres Authority (Finance Company) Regulations, 2021 (FC Regulations) and the ‘Framework for Aircraft Lease’ (AL framework) issued thereunder vide Circular No. 172/IFSCA/Finance Company Regulations/2022-23/01, dated May 18, 2022.
2. In order to enable purchase of assets covered by the AL framework by a Lessor in IFSC from the manufacturers of such assets in India, it has been decided to carry out the following amendments in the AL framework.
3. The Clause O.2. of the AL framework to be replaced with the following:
“O.2. Transactions with person(s) resident in India:
a. No Lessor shall purchase, lease or otherwise acquire (“acquiring”) any asset(s) covered under this framework (“assets”), where post-acquisition, the asset will be operated or used solely by person(s) resident in India or to provide services to person(s) resident in India;
b. The restrictions in clause (a) above shall not apply where:
i. acquiring by the Lessor is from such person(s) who is not a ‘Group Entity’ of the Lessor or;
ii. acquiring by a Lessor is as a part of sale and leaseback arrangement of such assets which are being imported into India for the first time, or;
iii. such asset(s) is acquired by the Lessor from a manufacturer of such asset(s) in India.
4. This circular is issued in exercise of powers conferred by section 12 and 13 of the IFSCA Act 2019, to develop and regulate the financial products, financial services and financial institutions in the IFSCs and the amendments to the AL Framework shall come into force with immediate effect.
5. The updated AL framework, incorporating the above-mentioned changes can be accessed at ifsca.gov.in
6. A copy of this circular is available on the website of the IFSCA at ifsca.gov.in/circular.
Yours faithfully,
Riddhi Bhandari
General Manager
riddhi.bhandari@ifsca.gov.in
