The Protection of Interest in Aircraft Objects Bill, 2025 was  passed in Lok Sabha recently, following its earlier acceptance in the Rajya Sabha.

About the Protection of Interest in Aircraft Objects Bill, 2025

• Aim: To align India’s aircraft leasing and financing ecosystem with global standards.
• It marks a critical step in deepening investor confidence in India’s rapidly growing aviation market.
• The Bill builds on the framework of the Cape Town Convention of 2001, which aimed to simplify and standardize international leasing agreements. 
  • India formally adopted this convention in 2008, but gaps in legal enforcement led to higher leasing costs—typically 8 to 10 percent higher than other nations. 
• With this bill, India seeks to plug those gaps, providing legal certainty to aircraft financiers and reducing costs for Indian carriers.

Key Features of the Bill

• Empowers the Central Government to frame rules to implement the Convention and Protocol.
• Designates the DGCA (Directorate General of Civil Aviation) as the Registry Authority.
• The DGCA will handle registration and de-registration of aircraft and related assets.
• Creditors must notify the DGCA before initiating any recovery action in case of payment defaults.
• In the event of a default, creditors can recover aircraft, helicopters, or engines within two months (or within a mutually agreed time frame).

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