Aviation Budget: Duty Cuts for Parts, Push for Seaplanes and Drones to Lower Costs

Hyderabad: The Union Budget has laid emphasis on seaplane operations and aircraft manufacturing in their push of aviation sector. It has proposed viability gap funding (VGF) scheme with customs duty exemptions for aircraft components and raw materials used in maintenance and repair, as the government looks to widen air connectivity and lower operating costs across the sector.

Industry leaders said the Union Budget proposals with regard to the aviation sector point to a longer view of capacity creation rather than short-term relief. Vamsi Vikas Ganesula, founder and managing director of Raghu Vamsi Aerospace Group, said the focus on import duty exemptions and reduced manufacturing frictions points to continuity in aerospace and defence policy.

Raw material relief for defence aircraft maintenance, repair, and overhaul, he said, supports sustainment and scale, while the review of drone components and seaplane incentives shows program-level thinking that links production with operations.

From an operator’s view, veteran aviator Chandra Sekar, business development director at Sky Choppers Logistics, told Deccan Chronicle that seaplane flying carries stricter requirements than conventional regional aviation. “If I have 100 hours I can become a captain under normal rules, but for a seaplane you need around 1,500 hours,” he said, adding that jetty construction and local issues have slowed projects earlier in Kerala and AP.

The Budget also proposes revised international baggage clearance rules to raise duty-free allowances and clarify temporary carriage of goods, addressing passenger concerns alongside the broader aviation push.

Basic customs duty exemption for components and parts required for manufacturing civilian, training and other aircraft, along with duty relief on raw materials imported for defence-sector MRO requirements are among the proposals. The measures come as India seeks fresh investment in aviation manufacturing and support services, amid projections that annual passenger traffic could reach 665 million by FY31.