Lack of proper policy for aircraft maintenance, repair and overhaul (MRO) is hampering the development of the sector in the country, reports indicate.
India is said to be having tremendous growth prospect in the MRO segment and hence industry body ASSOCHAM called for streamlining of taxes to encourage aviation MRO facilities.
Specifically, the industry wants steps to increase its competitiveness vis-a-vis its peers in neighbouring countries like Sri Lanka, Singapore and Indonesia.
According to an industry player, the sector currently suffers from high service tax incidence, high royalty charges by airport operator and delay in customs clearances of spare parts.
Industry sources call for clear policy on MRO in order to boost growth in the aviation sector.
By 2020, India’s aircraft MRO sector, which is presently worth $500 million in size, may grow to over $1.5 billion. India, currently, constitutes one per cent of the global MRO market worth $45 billion.
According to an estimate, servicing of an aircraft at a local MRO helps an airline to save 30 to 40 percent in plane’s maintenance costs, despite the tax regime on import of spares into the country making them 30 percent expensive as compared to international MROs.
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