India may grant infrastructure status to aircraft in the Union Budget for the Financial Year 2026-27 to ease airline financing and support growth in the aviation sector, unnamed industry sources have told The Hindu Business Line newspaper.

The move would allow airlines to access lower-interest loans under the Reserve Bank of India’s Priority Sector Lending framework and could broaden the pool of lenders, particularly benefiting start-up and small-capacity operators, the sources said.

Currently, five Indian carriers have 1,741 aircraft on order, according to ch-aviation fleet data, and smaller and newer airlines face challenges acquiring aircraft through leasing arrangements.

The sources said that the proposal had previously faced objections, as aircraft are movable assets. However, the government’s recent extension of infrastructure status to commercial shipping vessels has renewed interest in a similar designation for aircraft.

Industry executives noted that infrastructure classification could encourage a shift from operating leases to finance leases, reduce foreign exchange outflows through rupee-denominated loans, and open participation from insurance companies. The framework may also include guidelines requiring aircraft to be Indian-owned and registered domestically to ensure clear jurisdiction and repossession rules.

Others have suggested extending the policy to twin-engine helicopters used in offshore mining and exploration operations, as well as business jets, under a universal financing framework rather than limiting it to government-run special-purpose vehicles (SPVs).

IndiGo Airlines currently has 905 aircraft on order, Air India awaits delivery of 511 aircraft, Akasa Air has ordered 195, SpiceJet expects 129, and flybig - a single aircraft, according to ch-aviation data.