New TCSP and SPV Framework in GIFT City Strengthens Global Leasing Ecosystem

The International Financial Services Centres Authority has proposed a new regulatory framework to strengthen leasing activities in GIFT City. This move focuses on building a strong ecosystem for global investors while improving India’s position in international finance.

The proposal introduces a structured system for trust and company service providers and special purpose vehicles. Together, they aim to make leasing transactions more efficient, transparent, and globally competitive.

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Why Global Leasing Still Happens Outside India

Aircraft leasing is a major part of global finance. Countries like Ireland, Singapore, and the UAE dominate this space because they offer strong legal systems, tax clarity, and professional service networks.

India is one of the fastest-growing aviation markets. Airlines are expanding rapidly and ordering new aircraft. However, most of these aircraft are still leased from foreign jurisdictions.

This leads to:

• High foreign exchange outflow

• Dependence on global intermediaries

• Limited domestic value creation

The main reason is the lack of a complete ecosystem within India that supports complex financial structuring and governance.

What the New Framework Aims to Solve

The proposed framework by the International Financial Services Centres Authority focuses on closing these gaps.

It aims to:

• Attract global investors and lessors

• Improve regulatory clarity

• Strengthen governance and compliance

• Build trust with international financial institutions

This will help shift more leasing activity into GIFT City and reduce reliance on offshore markets.

Understanding TCSP and SPV in Simple Terms

What is a TCSP

A trust and company service provider helps set up and manage companies, trusts, or financial structures. In leasing, they handle:

• Company formation

• Compliance and documentation

• Administrative support

• Governance and fiduciary roles

They act as professional managers, ensuring everything runs smoothly and follows regulations.

What is an SPV

A special purpose vehicle is a separate company created for a specific transaction. In this case, it is used for leasing or financing aircraft.

Key features of an SPV:

• It owns the asset, such as an aircraft

• It leases the asset to airlines

• It is structured to reduce financial risk

SPVs are widely used globally because they isolate risk and improve efficiency.

How the TCSP and SPV Model Works

Under the proposed system:

• The SPV will act as the asset-owning leasing entity

• The TCSP will manage the SPV’s operations and compliance

This separation ensures the following:

• Better risk management

• Professional governance

• Clear accountability

It also aligns GIFT City with global best practices.

Strong Focus on International Investment

Around 70% of this framework is designed to attract foreign investment.

Key highlights include:

• TCSP services are mainly offered to non-residents

• Investors from low-risk jurisdictions are preferred

• Global capital can directly participate in Indian leasing structures

This creates a strong entry point for international investors looking for stable and regulated opportunities.

Benefits for India-Based Businesses

About 30% of the impact is focused on Indian businesses.

Indian airlines, lenders, and financial institutions will benefit from:

• Easier access to leasing structures within India

• Lower dependency on foreign intermediaries

• Better cost efficiency in the long term

Even though Indian entities may not directly control the SPV, they can still benefit through structured agreements.

Strong Governance and Compliance Standards

The framework places heavy emphasis on transparency and risk control.

TCSPs must follow strict rules, such as the following:

• Proper client verification and due diligence

• Separation of duties within operations

• Regular audits and reporting

• Maintaining records for at least five years

There is also a strong focus on AML and CFT compliance to meet global standards.

Economic Impact and Long-Term Growth

If implemented well, this framework can bring major benefits:

• Increase foreign capital inflow

• Reduce foreign exchange outflow

• Create high-skilled jobs in finance and compliance

• Strengthen India’s position in global aviation finance

According to industry trends, aircraft leasing is a multi-billion-dollar global market. Capturing even a small share can significantly boost India’s financial ecosystem.

What This Means for GIFT City

GIFT City is already emerging as a global financial hub. This framework adds another strong layer to its growth.

It helps build:

• A complete leasing ecosystem

• Global-level structuring capabilities

• Higher investor confidence

Over time, this can position GIFT City alongside established global leasing hubs.

Final Takeaway

The proposed TCSP and SPV framework is a strategic step by the International Financial Services Centres Authority to bring the global leasing business into India.

For international investors, it offers a regulated and efficient entry point. For Indian businesses, it reduces dependency on foreign markets.

Most importantly, it builds a strong financial ecosystem that supports long-term growth, transparency, and global competitiveness.

Connect with CA Gaurav Kanudawala, Founder of GIFT CFO.

Call: +919726372715Email: info@giftcfo.com

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