The Budget proposals for the civil aviation sector will help India become a hub for MRO activities and will ensure that domestic carriers' business worth Rs 5,000 crore remains within the country, Union Minister Ashok Gajapathi Raju said today.
In the Budget 2016-17, the government has come out with various proposals, including customs and excise duty exemption for tools and tool-kits used in Maintenance, Repair and Overhaul (MRO) works.
"The MRO business of Indian carriers is around Rs 5000 crore, 90 per cent of which is currently spent outside India -- in Sri Lanka, Singapore, Malaysia and UAE.
"Given our technology and skill base, the government is keen to develop India as an MRO hub in Asia, attracting business from foreign airlines while retaining the domestic business," Raju, who is the Civil Aviation Minister, said.
In line with the Make In India initiative, many other incentives have also been extended to the MRO segment. These include scrapping the one-year restriction for utilisation of duty free parts and permitting import of unserviceable parts by MROs for providing exchange.
Besides, foreign aircraft brought to India for MRO work would be allowed to stay up to six months or as extended by aviation regulator DGCA. Such aircraft would also be allowed to carry passengers in the flights at the beginning and end of the period of stay in India.
Further, Raju said the Centre would partner with states to revive unserved and under-served airports.
According to the Minister, implementation fo Indian Customs Single Window Project would help reduce the time taken for export and import of air cargo.
"The opportunity for deferred payment of customs duties as provided by the Budget will facilitate importers and exporters with proven track record for faster processing of cargo," he noted.
On the government deciding to hike excise duty on jet fuel to 14 per cent from 8 per cent, Raju said the decrease in ATF (Aviation Turbine Fuel) base price over the last 13 months was around 25.04 per cent while hike in duty would push the price by around 6.56 per cent.
