Budget 2026: Will aircraft get infrastructure status? What it means?
19 Jan 2026

The Union Budget for 2026-27 may consider granting infrastructure status to aircraft, a move that could significantly boost the growth of India's aviation sector.

The proposal, if implemented, would ease financing constraints for airlines and enable them to acquire aircraft at more competitive rates.

This comes as Indian carriers have placed orders for over 1,700 planes amid strong growth projections for the sector.

Smaller airlines face challenges in aircraft acquisition
Acquisition hurdles

Despite the growth, smaller airlines are still struggling to acquire planes through leasing arrangements. Some have even considered outright purchases.

However, these plans have been hampered by high interest rates and a lack of willingness from domestic banks to finance aircraft acquisitions.

The proposed infrastructure status could help solve this problem by enabling airlines to access lower-cost loans, including under the Priority Sector Lending (PSL) framework.

Infrastructure status could broaden lender base
Lender participation

The infrastructure status could also widen the lender base, allowing insurance companies to participate and banks to provide longer repayment tenures.

This move could potentially encourage a shift from operating leases to finance leases, addressing domestic lenders' risk concerns and high borrowing costs.

It would also align financing structures better under PSL norms and rupee-denominated loans for aircraft purchases could reduce foreign exchange outflows as fleet additions accelerate.