Budget 2019

Budget 2019 could see MRO sector doing Make in India

Our Bureau New Delhi | Updated on July 06, 2019 Published on July 06, 2019

The budget’s proposals will make the MRO industry viable, say analysts.   -  The Hindu

Union Budget 2019-20’s focus on the Maintenance, Repair and Overhaul (MRO) industry has been welcomed by the industry. In her speech, the Finance Minister said that the government will leverage India’s engineering advantage and potential to achieve self-reliance in this vital aviation segment by adopting suitable policy interventions for the development of the industry.

Commenting on the Budget proposals for the MRO industry, Ravi Menon, Executive Director, Air Works said that the proposals are not about cost reduction. “Hopefully, the intent stated will create a level playing field in the region in terms of cost competitiveness. The larger benefit will be the progressive development towards self sufficiency in aircraft maintenance and engineering services. India has the potential to transform into a MRO hub in this region. As the saying goes ‘even eagles need a push’. How the stated intent translates into reality will become evident in the next couple of months,” he said.

Others from the industry felt that this push for the MRO sector will mean that the government’s Make in India programme will get a chance of becoming a reality. According to a MRO player, “The multiplier effect of such MRO businesses could have a far reaching positive impact on the Made in India programme and will encourage operators in this part of the world to send their aircraft to India for major repairs. This will also contribute to better employment opportunities besides significantly contributing to the country’s GDP,” adding that the budget’s proposals will make the MRO industry viable through a friendly tax regime as airline operators will get their engines and aircraft served here instead of sending them abroad. Menon added that from an MRO perspective the Make in India programme will graduate from a slogan to a reality.

According to Bharat Malkani, President, MRO Association of India they were confident of turning India from an importer of MRO to a net exporter and create over 100,000 direct jobs and revenues exceeding ₹ 35,000 crore in the next five years.

Citing another benefit of the push to the MRO sector, L Badri Narayanan, Partner Lakshmikumaran & Sridharan Attorneys, added that by undertaking aviation financing in India, apart from creating jobs in the aviation financing market, it is expected that Indian financial SEZs can develop further and cater to this area. “It is therefore expected that several regulatory changes would be introduced to further strengthen India’s position in the aviation market,” he said.

Published on July 06, 2019
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