Economic Regulation Division

The ER Division is entrusted with policy coordination and regulatory facilitation across key domains, including: Aircraft Maintenance, Repair and Overhaul (MRO); aircraft manufacturing (including seaplane manufacturing and the Regional Transport Aircraft [RTA] programme); Aircraft Component Manufacturing (ACM); aircraft financing and leasing; tax-related issues of the aviation sector; PM Gati Shakti; Krishi Udan; VAT on Aviation Turbine Fuel (ATF); and FTAs and Rules of Origin related matters. It also handles PMO and VIP references, Public Grievances, Parliament matters, RTI, and related administrative matters.

The Division works to promote domestic aircraft and component manufacturing, develop an aircraft leasing and financing hub at GIFT IFSC, expand Indian banking participation in aircraft financing, scale domestic MRO capabilities via policy and tax reforms, address ease-of-doing-business and Budget proposals, represent civil aviation interests in trade agreements, and coordinate initiatives under PM Gati Shakti and Krishi Udan.

The ER Division handles the following core responsibilities:

1. Aircraft and Component Manufacturing:

• Pursuing domestic manufacture of aircraft, including seaplanes and the Regional Transport Aircraft (RTA) programme, as well as high-precision aircraft components.
• Supporting a network of 993 registered MSMEs, 409 recognized start-ups, and several PSUs collaborating with global aerospace OEMs (such as Boeing, Airbus, Rolls-Royce, Honeywell, and Lockheed Martin).
• Targeting expansion from current OEM sourcing levels (over USD 2.6 billion annually) into a USD 10 billion industry over the next 10 to 15 years.

2. Aircraft Leasing and Financing:

• Developing an onshore leasing and financing ecosystem at the International Financial Services Centre (IFSC) in GIFT City, Gujarat.
• Enabling measures such as tax incentives, simplified import procedures, dedicated regulations, and legal protections aligned with the Cape Town Convention.
• Tracking and facilitating registered leasing entities (43 entities registered as of July 2026, leasing 250 aircraft, 84 engines, and 88 other equipment).
• Encouraging Indian bank participation in aircraft financing and resolving taxation issues.

3. Maintenance, Repair and Overhaul (MRO):

• Formulating policies, tax rationalization, and ease-of-doing-business initiatives to scale India's MRO market (projected to reach USD 4 billion by 2031 from USD 2.5 billion in 2025).
• Facilitating entry permits for foreign technical experts.
• Supporting international regulatory harmonization and cooperation between DGCA and the European Union Aviation Safety Agency (EASA).

4. Tax, Trade and Other Matters:

• Handling VAT on Aviation Turbine Fuel (ATF), GST matters, and pre-Budget/tax proposals.
• Representing aviation interests in bilateral and multilateral Free Trade Agreements (FTAs) and Rules of Origin discussions (e.g., with Korea, Canada, Israel, EAEU, and the United States).
• Coordinating schemes and infrastructure planning under PM Gati Shakti and the Krishi Udan Scheme.

Email: ersec.moca@nic.in

Address: Rajiv Gandhi Bhawan, Ministry of Civil Aviation, Government of India, New Delhi – 110003

Tel: 011-24618528