India’s Business Aviation Sector Seeks Lift Amid Policy, Tax, and Infrastructure Headwinds
- Despite growing demand and Dassault’s India plans, business aviation struggles with import duties and limited MRO support.
- Operators face high costs, airport inefficiencies, and public perception issues that stall broader adoption.
- Industry urges reforms on fractional ownership, terminal access, and regulatory clarity to fuel sustainable growth.
During the Paris Airshow, there was a quiet but important announcement by France’s Dassault Aviation to manufacture Falcon 2000 business jets in India from 2028. This is a first for the French company to manufacture outside of France and in collaboration with Anil Ambani’s Reliance Aerostructure Limited. Dassault Aviation is taking a big bet on the business jet market in the Asia Pacific region, particularly India, which is witnessing encouraging growth but with its own set of challenges.
In the region, India is the third-largest business jets market after China and Australia. The 122 non-scheduled operators in the country operate 438 aircraft, both fixed wing and rotary. Of the 208 fixed-wing aircraft, 168 are business jets, with an annual net increase of 18 aircraft in 2024, and the trend is likely to continue in 2025. With the Indian economy doing well and the number of high net-worth individuals (HNIs – having more than $10 million in wealth) growing at a healthy pace, business aviation is sitting pretty, despite several operational challenges. According to Knight Frank’s Wealth Report 2025, there was a 6 per cent growth in the number (85,698) of HNIs in 2024, expected to touch 93,753 by 2028, and this is expected to spur investments in business jets besides those chartering them for their travel, avoiding flying low-cost carriers.
Import Duty Burden
The Dassault-Reliance joint venture intends to tap the Indian potential, besides the growth in the region. The collaboration is likely to skirt one of the biggest challenges for business jet operators in India – that of substantial import duties.
Importing an entire aircraft (either a business jet or turboprop) for private or charter use draws several duties and taxes. A non-scheduled operator has to pay IGST (integrated goods and services tax) of 28 per cent. Last year, the GST Council standardised IGST on aircraft parts to 5 per cent, but this does not cover the whole aircraft. With the industry urging the Ministry of Civil Aviation, the latter has recommended scrapping the 2.5% basic customs duty and aligning NSOP jets with the 0% basic customs duty. The industry believes that this will lower costs and catapult the growth, besides bringing in much-needed operational efficiencies and contributing in its way to economic growth. The industry as such has been clamouring for a use-based tax model, that is, taxing operations rather than imports. It remains to be seen what decision the government will arrive at.
Perception Matters
The perception, however, in the government and the public at large is that NSOPs all cater to the rich and powerful, hence the need to tax them. While this could be partially true, general and business aviation contribute to the economy, enabling connectivity to unserved regions by way of tourism, moving personnel to remote manufacturing hubs, medical evacuation, etc. The ‘elite’ perception is difficult to erase, even while the Business Aircraft Operators Association has been campaigning to set that. This perception has added to the challenges as there are unregulated charges at airports, whether it is ground handling, parking, hangar, etc. The demand by the industry is establishing fixed base operators (FBOs), which can facilitate smooth operations, thus giving the needed push for business aviation growth.
Fractional Ownership, a Viable Business Model
The industry is also seeking from the government a push to ‘fractional ownership’ and ‘aircraft management’ practices, considering that many HNIs do not want to invest in an aircraft which they may not use too often in a year. Here, fractional ownership, with lower acquisition costs, makes a good investment proposition. Many business jets in India are underutilised, making operations inefficient, and with fractional ownership, this could be addressed considerably.
As business aviation has high operational costs (fuel in India is heavily taxed and small operators have to plan their unplanned schedules properly); import duties and high cost of ownership (maintenance, crew salaries, training, insurance and regulatory compliances), fractional ownership spreads the risk across the ownership, thus making it a viable business venture and the government needs to make the process less cumbersome.
Exclusive Terminals Needed
Another issue that is kind of hindering the growth potential is that of exclusive terminals for business/ general aviation aircraft. There are only five terminals exclusively (Delhi, Mumbai, Hyderabad, Ahmedabad and Cochin) for general/business aviation in a country with vast proportions, area and population-wise. At regular airports, the industry demand is for clear demarcation between aeronautical and non-aeronautical services, as several business aviation operators have felt that the levies are not consistent with the quality of services provided.
The BAOA recently submitted a representation to the Civil Aviation Secretary requesting issuance of instructions for the publication of itemised ground handling charges for NSOP and GA aircraft at public airports other than major airports, in the interest of transparency and fair pricing. This was followed up with a meeting with a senior official dealing with ground handling services at public airports in India. The association has asked its members to share details of excessive charges paid for services, as comprehensive ones, when only very limited or just one or two ground handling support services were availed from the airport operators, especially in the case of small, below 9-seater, aircraft. Such discrepancies or discriminations need to be addressed by the regulatory body to help the sector grow. The operators are seeking fair slot allocation, improved parking infrastructure, and future-ready facilities for general aviation.
The BAOA has urged the Directorate General of Civil Aviation (DGCA) to have specific and proportionate regulations governing BA operations and develop standard operating procedures (SOPs) for helicopter operations covering all roles that these helicopters can perform. The association said that separate regulations for BA, including helicopter operations, are the need of the hour as this will greatly improve the operating environment for all sectors.
Aircraft Management Concepts
The industry body is continuously engaging with the DGCA on key regulatory matters impacting the sector. A major area of focus is the ongoing review and amendment of the Civil Aviation Requirements (CARs) pursuant to the revised Aircraft Act 2024. The industry has drawn the attention of the regulators to the challenges faced by aircraft management companies operating under the owner-operator model. “We remain committed to working with the DGCA in a collaborative and constructive manner to shape a more enabling regulatory framework that aligns with global best practices, suitably adapted for Indian conditions,” it said.
Even as aircraft numbers are growing, the industry is urging the government to come out with a policy to support the development of MRO and continuous airworthiness infrastructure for GA/BA aircraft at key public airports. Presently, the business jets go overseas for MRO, which translates to outgo of foreign exchange and substantial downtime of an aircraft. The proposed Falcon venture is likely to have an MRO spin-off once the aircraft gains significant sales numbers.
Pilot Shortage
One other challenge that the business aviation segment faces is that of human resources – finding pilots and engineers. As such, commercial airlines are facing a massive pilot and engineer shortage. According to CAPA India, the country will need 10,900 additional pilots by 2030, bringing the total to 22,400 by 2029, up from the current 11,745.
It is not surprising that anyone coming out with a commercial pilot licence after having paid huge sums of money for training would prefer commercial airlines over business/general aviation, unless, of course, the jet owner is willing to cough up good pay and incentives for flying. One of the recommendations is to have different FDTL (flight duty time limitations) for business jets, incorporating specific provisions for landing restrictions, resting time, and flight time proportionate to the nature of flying undertaken in the sector.
The BAOA has suggested that the government simplify the employment of foreign aircrews/engineers for business aviation aircraft. The DGCA, it said, should expedite approvals of foreign original equipment manufacturers (OEM) and MRO applications and make the procedures more user-friendly.
In conclusion with the aviation sector – both commercial and general and business – on a growth trajectory path, there is urgency to streamline regulatory approvals via digital platforms; development of dedicated general aviation terminals; establishing MROs; rationalising taxes on aviation turbine fuel (ATF) and aircraft imports; encouraging public-private partnerships to boost infrastructure and creating awareness of the economic benefits of business aviation for regional development. It is a work in progress.
