Union Minister for Civil Aviation, Mr. Rammohan Naidu, has reaffirmed the Indian government’s dedication to enhancing the country’s Maintenance, Repair, and Overhaul (MRO) sector, aiming to make India a premier destination for both domestic and international airlines. Speaking in the Lok Sabha, Naidu addressed the sector's challenges and outlined the government's strategic initiatives designed to bolster the industry.

Naidu highlighted that the Indian MRO sector, currently valued at US$ 2 billion, is expected to experience significant growth, potentially doubling in size to US$ 4 billion over the next seven years. This anticipated growth is fueled by the large order book of over 1,100 aircraft by domestic airlines, which underscores the burgeoning demand for MRO services in India.

A major component of the government’s strategy involves reforming the Goods and Services Tax (GST) system. Recently, a uniform GST rate of 5% was applied to all aircraft parts and components, which Naidu described as a "historic decision". This reform aims to simplify the tax structure, integrating domestic MRO services into global value chains and making Indian MRO facilities more competitive on the international stage.

Further supporting the sector’s growth, the government is considering extending the Production Linked Incentive (PLI) scheme to the MRO industry. This potential extension could provide additional incentives to accelerate industry development. In addition, the government is focusing on strategic locations such as Thiruvananthapuram to attract international carriers and establish India as a hub for global MRO services.

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Additional support measures include:

Extension of Export Period: Lengthening the export period for goods imported for repair.

Customs Duty Exemptions: Exempting customs duties on tools used in MRO operations.

100% FDI Allowance: Allowing 100% Foreign Direct Investment (FDI) via the Automatic Route to enhance the sector’s global competitiveness.

These initiatives are aimed at creating a robust environment for MRO services, ensuring that India not only caters to its domestic needs but also attracts international carriers seeking high-quality maintenance facilities. By implementing these measures, the government seeks to position India as a leading player in the global MRO industry, driving significant economic growth and technological advancement in the sector.

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