The Rajya Sabha has approved the Protection of Interests in Aircraft Objects Bill, 2025, a crucial step towards solidifying India’s position in global aviation leasing. The legislation, passed on Tuesday, aims to give legal effect to international agreements governing aircraft assets, bringing greater clarity and security to both lessors and lessees in India’s aviation industry.

In a statement during the discussion, Civil Aviation Minister Kinjarapu Rammohan Naidu highlighted that the bill would resolve long-standing uncertainties in the sector. "This bill addresses a grey area in aviation, offering much-needed clarity. It will provide essential security for both lessors and lessees, supporting the growth of the aviation market," he said. Naidu expressed confidence that the bill would boost the leasing industry, which is crucial for the sector’s development.

The legislation seeks to implement India’s commitments under the Convention on International Interests in Mobile Equipment (commonly referred to as the Cape Town Convention of 2001) and its Protocol on Matters specific to Aircraft Equipment, to which India became a signatory in 2008. The bill is designed to bring these international agreements into India’s legal framework, ensuring that creditors and stakeholders in the aviation leasing space are protected under clear guidelines.

Key provisions of the bill include the requirement for creditors to notify the Directorate General of Civil Aviation (DGCA) before initiating any remedies in the event of a default. In cases where defaults occur, creditors will be entitled to recover assets such as aircraft, helicopters, and engines within two months, or a mutually agreed upon timeframe.

"This bill is vital for the aviation industry. It will transform the landscape by aligning India’s laws with international standards," Naidu added. The bill was initially introduced in the Rajya Sabha on February 10, 2025, and its passage marks a significant milestone in the country’s aviation infrastructure.

The Cape Town Convention and its Protocol aim to standardize legal processes surrounding the securing of high-value aviation assets. By incorporating these into Indian law, the country is enhancing its legal framework for the protection of aviation investments, benefiting both local and international stakeholders.

Naidu further explained that the bill would bring India in line with other global aviation powers, ensuring uniformity in how high-value aviation equipment is secured, enhancing investor confidence, and promoting the leasing sector's growth in India.