In the Union Budget for fiscal year 2024-25, which was presented by Finance Minister Nirmala Sitharaman on Tuesday, the government has proposed certain incentives to boost maintenance, repair and overhaul (MRO) activities in the aviation and shipping sectors.

The government has extended the period for export of goods imported for repairs from six months to one year.

“To promote domestic aviation and boat & ship MRO, I propose to extend the period for export of goods imported for repairs from six months to one year. In the same vein, I propose to extend the time limit for re-import of goods for repairs under warranty from three to five years,” FM Nirmala Sitharaman said.

Earlier in July, the government had implemented the 5 per cent uniform integrated goods and services tax (IGST) rate on all aircraft and aircraft engine parts.

Prior to this change, IGST rates on all aircraft and engine parts were in the range of 5 per cent to 28 per cent.

India is one of the fastest-growing domestic aviation markets in the world.

According to the Economic Survey 2023-24 report, tabled by Sitharaman in Parliament on Monday, India's aviation industry is on the cusp of unprecedented growth, and there should be a focus on improving the efficiency and viability of airlines while ensuring environmental sustainability.

“The aviation industry in India is on the cusp of unprecedented growth, with a strong order book of more than 1500 aircraft placed by Indian airlines and a projected demand for over 2,200 aircraft by 2042,” it said.

The survey said there is a need to provide adequate long-haul connectivity from India by strengthening Indian airlines, as a large proportion of Indian international traffic goes through connectivity hubs in the Middle East and Southeast Asia.

The aviation sector holds significant potential, requiring collaborative efforts between the government, industry stakeholders, and international partners. The survey said investments in infrastructure, skill development, and sustainability initiatives will fuel the sector's future expansion in India.

(With Inputs From Agencies)