Rajya Sabha Passes Protection of Interests in Aircraft Objects Bill, 2025

Legislation to Strengthen Aircraft Leasing Industry and Ensure Legal Clarity​

New Delhi, April 1, 2025 — The Rajya Sabha on Tuesday passed The Protection of Interests in Aircraft Objects Bill, 2025, a landmark legislation aimed at providing legal backing to international aviation agreements and bringing much-needed clarity to India’s aviation leasing sector.

Minister of Civil Aviation Kinjarapu Rammohan Naidu, while replying to the discussion on the bill, emphasized its significance in addressing long-standing legal ambiguities surrounding aircraft leasing and repossession rights.

“With the bringing of this bill, definitely it is going to create a lot more clarity. We hope this is going to give a lot of push for the leasing industry, which is the need of the hour. There is an immediate need for this bill to be there in the industry,” said Naidu.

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Alignment with International Aviation Conventions​

The bill enforces provisions of two major international agreements to which India has been a signatory since 2008:

• The Convention on International Interests in Mobile Equipment (Capetown Convention, 2001)
• The Protocol to the Convention on Matters Specific to Aircraft Equipment

These agreements aim to standardize legal protections for high-value aviation assets such as aircraft, helicopters, and engines across jurisdictions.

Key Provisions of the Bill​

Under the new legislation:

• Creditors must notify the Directorate General of Civil Aviation (DGCA) in the event of a default before invoking any remedies.
• In the case of a default, creditors are entitled to reclaim possession of the aircraft asset within two months or any mutually agreed period, whichever is earlier.

These provisions are expected to streamline repossession processes, reduce disputes, and build trust among global lessors and investors.

A Step Toward Revamping India’s Aviation Market​

Highlighting the transformative potential of the bill, the Civil Aviation Minister remarked:

“This is a very important Bill which the industry needs today. It is going to change the aviation landscape of the country.”

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Introduced in the Rajya Sabha on February 10, 2025, the bill’s primary objective is to give the force of law to the Capetown Convention and its associated protocol, enabling India to fully align with global aviation finance norms under the International Civil Aviation Organisation (ICAO) framework.

By bridging legal gaps and aligning with global standards, the legislation is expected to significantly boost India’s aircraft leasing and financing ecosystem, ultimately strengthening the country’s position in the global aviation sector.