Lok Sabha Question No. 200 (UNSTARRED), answered on 2023-02-02
Subject: MRO Policy
Ministry: CIVIL AVIATION
Asked by: Rajiv Pratap Rudy

## GOVERNMENT OF INDIA

## MINISTRY OF CIVIL AVIATION

## Lok Sabha

## UNSTARRED QUESTION NO. : 200 ( TO BE ANSWERED ON THE  2nd February 2023 )

## MRO POLICY

## 200.    SHRI RAJIV PRATAP RUDY Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the Government has recently released the Maintenance, Repair and Overhaul (MRO) policy for the aviation sector and if so, the details thereof;
- (b) the current share of India in the global MRO market;
- (c)  the  details  of  the  turnover  of  the  MRO  industry  in  the  country during the last five years and the projected growth potential in the next five years;
- (d) whether the Government proposes to develop India into a global MRO hub destination; and
- (e)  if  so,  the  details  thereof  along  with  the  proposed  timeline  for such development?

## ANSWER

Minister of State in the Ministry of (GEN. (DR) V. K. SINGH (RETD))

CIVIL  AVIATION

(a): Government announced new Maintenance, Repair and Overhaul (MRO) guidelines on 1st September, 2021 with a view to create a congenial  atmosphere  in  the  country  for  the  development  of  the MRO industry for aircraft/ helicopter/ drones and their engines and other parts. These guidelines inter-alia provide for transparency in the  allotment  of  land  at  Airports  Authority  of  India  (AAI)  airports through call of open tenders and doing away with levy of any royalty or cess of whatsoever nature on MRO operators.

- (b)  and  (c):  Government  does  not  maintain  the  data  of  share  of Indian MRO market in global market and the financial information of
- MRO sector. As per industry estimates, the market size of the MRO sector in India stood at around USD 2 billion and 85% of MRO work is done abroad. (d)  and  (e):  The  Government's  aim  is  to  facilitate  setting  up  of aircraft MRO services in India through various policy, regulatory and other incentives, which is a continuous process. The key developments  and  initiatives  undertaken  by  the  Government  to encourage  growth  of  domestic  MRO  sector  and  enhance  the commercial attractiveness of MROs in India include: i. Government has announced new MRO Guidelines on 1st September, 2021 which would further encourage the MRO organizations and OEMs to setup workshops in India and create a conducive environment towards making India a global hub of MRO. ii. GST on MRO has been reduced from 18% to 5% with full Input Tax Credit from 1st April, 2020. iii. Transactions sub-contracted by foreign original equipment manufacturers  (OEMs)/  MRO  to  domestic  MRO  are  treated  as 'exports' with zero-rated GST from 1st April, 2020 iv. Exempted Customs Duty on tools and tool kits v.  Reduced  Goods  and  Services  Tax  rates  on  various  spare  parts, accessories, and consumables vi. Simplified clearance processing of parts vii. Relaxed restriction on utilization of duty-free parts from one year to three years viii.  Extended stay in India of foreign aircraft for entire duration of MRO work or 6 months, whichever is lesser ix. Revised the Notification to enable export of serviceable parts x. 100% Foreign Direct Investment permitted via automatic route for MRO xi. Liberalized policy for borrowing and lending in Foreign Currency and Rupees on competitive terms for MROs xii.  Modalities  prescribed  for  concessional  temporary  imports  of spare parts by foreign airlines for repair of their aircraft in transit.

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