India Takes Flight: Revolutionizing Aircraft Maintenance and Repair

India is emerging as a global leader in aircraft maintenance through strategic government reforms. A landmark tax reform and new policies have expanded MRO facilities and attracted international investment, making India a preferred destination for aviation maintenance.

India is no longer just a fast-growing aviation market; it is now a key player in the global Maintenance, Repair, and Overhaul (MRO) sector. Through precise fiscal and regulatory changes, the Indian government has significantly increased the number of MRO facilities from 96 in 2014 to 166 expected by 2025.

The pivotal moment for the industry occurred on July 12, 2024, when a landmark tax reform was introduced. By instituting a unified 5% Integrated Goods and Services Tax (IGST) on imported aircraft parts and tools, the government dismantled the previously complex "inverted duty structure." This has made it more affordable for domestic companies to procure high-tech components, thereby allowing Indian MROs to compete with international centers on cost.

Structural bottlenecks hampering the sector's potential have been addressed through several measures. In September 2021, the Ministry of Civil Aviation issued comprehensive MRO guidelines removing royalties on land allotments at Airports Authority of India (AAI) airports, enhancing transparency in allocation. Further policies in the Union Budget 2024-25, including extended export timelines for repair-bound goods, aim to provide MRO facilities with the flexibility needed to handle international aircraft.