Business Aviation Boom or Bust? 7 Powerful Reforms India Must Enact Now to Unlock Sky-High Potential

India’s business aviation sector, fueled by a booming economy and a surge in ultra-high-net-worth individuals, faces growth barriers due to outdated tax policies and regulatory complexities. A steep 28% import tax on private aircraft—versus 5% for charter operators—has led to misuse of nonscheduled operator permits (NSOPs), distorting the market. Industry leaders advocate for tax reforms and clearer frameworks for fractional ownership, a model that could democratize access but remains stalled by regulatory ambiguity.

Infrastructure gaps, including scarce dedicated terminals and limited maintenance facilities, further hinder progress. While foreign operators face cabotage restrictions, domestic players like Fly Sirius defend these rules to protect local growth. Rotorcraft demand is rising, yet India’s fleet remains small, with calls for shared ownership models to unlock potential in sectors like healthcare and tourism. Financing innovations, such as tax-free leasing zones, offer workarounds, but systemic reforms—streamlined regulations, infrastructure investment, and balanced safety-innovation policies—are critical to align the sector with India’s economic ambitions. 

Business Aviation Boom or Bust? 7 Powerful Reforms India Must Enact Now to Unlock Sky-High Potential

India’s business aviation sector stands at a crossroads. While the country’s economic ascent—poised to become the world’s third-largest economy by 2027—suggests a golden era for private air travel, the industry faces turbulence from outdated tax policies, regulatory bottlenecks, and infrastructure gaps. Industry leaders, gathered at the recent Business Aviation Operators Association (BAOA) conference, underscored urgent reforms needed to align the sector with India’s growth trajectory.  

Economic Boom Meets Regulatory Roadblocks 

India’s rapid economic expansion, with GDP projected to surpass Japan’s by 2025, has fueled a surge in ultra-high-net-worth individuals (UHNWIs). The number of Indian UHNWIs grew by 6% in 2024, with Knight Frank predicting a 50% rise by 2028. Yet, despite this wealth boom, business aviation growth lags. A key culprit? A convoluted tax regime.  

Private aircraft imports face a steep 28% tax, while those registered for charter services under nonscheduled operator permits (NSOP) incur just 5%. This disparity has led to creative workarounds, with many private jets registered under NSOPs for ambiguous “support services” to exploit the lower rate. RK Bali, BAOA’s managing director, argues that rationalizing India’s 434-strong NSOP fleet (spanning 34 aircraft types) is critical. “Fractional ownership could democratize access and spur growth,” he notes, but regulatory clarity remains elusive.  

Fractional Ownership: A Missing Piece 

Fractional ownership—a model thriving in markets like the U.S.—could revolutionize India’s sector by lowering entry costs. However, Asanga Chuba Ao of India’s Civil Aviation Ministry admits progress is slow, citing the need to tailor frameworks to India’s tax landscape. Without clear guidelines, operators and investors remain hesitant, stifling innovation.  

Infrastructure Gaps and Operational Hurdles 

India’s infrastructure struggles to keep pace with demand. While a new FBO in Cochin joins facilities in Delhi, Mumbai, and Ahmedabad, most airports lack dedicated bizav terminals and ramp space. Naveen Jindal, chairman of Jindal Steel & Power and owner of Flysafe Aviation, highlights limited maintenance capabilities: “We send engines abroad for overhaul and aircraft to Europe for painting.”  

Regulatory rigidity also hampers efficiency. Operators seek more flexibility in visual flight rules (VFR) and streamlined processes for permits. Meanwhile, foreign operators face cabotage restrictions, barring them from domestic passenger flights—a policy defended by local players like Fly Sirius, which plans to expand its fleet to 20 aircraft by 2028.  

Rotorcraft: Untapped Potential 

India’s rotorcraft fleet, at just 200 helicopters, pales next to smaller neighbors. Yet demand is rising, particularly for emergency medical services, energy projects, and tourism. Jubilant Enpro’s Sudhir Agarwal sees fractional ownership as key here too, enabling cost-sharing for sectors reluctant to own assets outright. The DGCA’s focus on vertiport safety signals readiness for growth, but industry leaders stress that regulatory support must accelerate.  

Financing Innovations and Global Interest 

High import taxes have spurred creative financing. Gujarat’s International Finance Tec-City zone offers tax breaks for leased aircraft, attracting international lenders. Meanwhile, global players like LunaJets eye India’s market but chafe at cabotage rules. “Domestic travel must remain with Indian operators,” insists Fly Sirius’ Arun Kashyap, reflecting a protectionist stance that divides the industry.  

The Path Forward 

For India’s bizav sector to mirror its economic might, stakeholders emphasize:  

• Tax Reform: Harmonizing import duties to discourage NSOP misuse.  

• Regulatory Modernization: Clear rules for fractional ownership and streamlined NSOP processes.  

• Infrastructure Investment: Expanding FBOs, maintenance hubs, and airport access.  

• Rotorcraft Expansion: Incentivizing shared ownership models for helicopters. 

As Manish Kumar of the DGCA highlights, safety remains paramount, but balancing caution with innovation is crucial. With reforms, India could transform its bizav sector into a catalyst for economic efficiency—connecting executives, entrepreneurs, and high-net-worth individuals across its vast landscape. The sky’s the limit, but only if the groundwork is laid.