Having represented a number of aircraft owners and lessors over the last few decades, it is well known that proper evidence is required from a lessee to prove that it is entitled to import such aircraft into India. Therefore, it is imperative that one understands the process of obtaining import permission from the relevant Authorities in India. The Directorate General of Civil Aviation (the “DGCA“) has very recently, i.e. on the 23rd of August, 2017, amended the procedure for obtaining permission to import / acquire aircraft in India.
This article attempts to summarize the procedure required to assist you and to give you the upper hand in negotiations with a perspective Indian purchaser and / or perspective Indian lessee of your aircraft.
The responsibility for providing such permission of import / acquisition rests on two Authorities namely, the DGCA and the Directorate General of Foreign Trade (the “DGFT“).
As there are vastly different requirements for permission to import aircraft for private use vis-à-vis permission to import aircraft for non – private use (i.e. scheduled, non-scheduled use, etc.). There are however some common requirements which apply across the board to all aircraft intended to be imported into India, there are:
- The aircraft should meet the criteria in relation to its type certificate, age and other requirements as laid down in other CAR’s issued by the DGCA;
- From 01.01.2019, all aircraft must be GAGAN enabled.
AIRCRAFT INTENDED FOR NON PRIVATE USE:
This head will cover most categories of imports where the aircraft is being imported for use, other than for private use. It has been clarified that for aircraft intended to be imported for non-private use, there shall be no requirement for the grant of an Import Licence by the DGFT. The requirement of an Import Licence is fastened only on the intended import of aircraft for private use. The Government states that there shall be a two stage permission for import:
(i) IN PRINCIPLE APPROVAL: “In Principle Approval” shall be granted by the Directorate of Air Transport (the “DAT“) when an applicant complies with all requirements of Air Transport Circular (“ATC“) No. 2 of 2017 as well as any relevant Civil Aviation Requirements (“CAR’s“). For the grant of “In Principle Approval“, an applicant must complete Part I of Annexure “A” of ATC No. 2 of 2017. The details required by Part I of Annexure “A” of ATC No. 2 of 2017 are as follows:
- Name & address of the applicant / operator;
- Category applied under, i.e. scheduled, non-scheduled, regional scheduled, scheduled commuter or private;
- Details of existing fleet strength;
- Details of aircraft proposed to be imported / acquired (MSN, Type & Make, TCDS No., Nationality, Registration, AUW and Year of Manufacture;
- Details of whether the aircraft complies with all Airworthiness Directives (“AD’s“) mandated by the authority issuing the type certificate;
- Details of paid up capital of the Operator (only in case of scheduled and non-scheduled operators);
- Details as to the mode of import / acquisition, i.e. whether it is an outright purchase or dry lease. In case of outright purchases, the name and address of the owner (name and address of the manufacturer in case of a new aircraft) is required. In case of a dry lease, the name and address of the Owner, Lessor and Lessee shall be required;
- Usual station / details of night parking permission allotted;
- Details of maintenance capabilities to maintain the aircraft;
- Details of security arrangements taken by the applicant;
- Details of fee paid (note: all fees must now be paid online); and
- An undertaking that (i) the aircraft will be used only for the purpose it is being imported; (ii) it shall meet the airworthiness / type acceptance criteria for import as per the relevant CAR’s; (iii) the aircraft, after registration in India shall be maintained, operated and de-registered in accordance with the Indian rules and that there is no binding limitation of this in the lease agreement, etc.
On receiving all the aforementioned documentation, the DAT will issue the applicant an “In Principle Approval” for permission to import the aircraft. It is important to note that in case the DGCA feels the requirement of any other documents, they may withhold the “In Principle Approval” until the additional documentation is furnished to their satisfaction.
(ii) NO OBJECTION CERTIFICATE (“NOC“) FOR IMPORT: Once an applicant has been granted “In Principle Approval“, he must then apply to the DGCA for the “NOC for Import“. An applicant for the “NOC for Import” must apply to the DAT once again, this time completing the requirements of Part B of Annexure “A” of ATC No. 2 of 2017. The documents required are:
- The “In Principle Approval” already accorded by the DAT;
- Type and make of aircraft;
- Nationality & registration of aircraft;
- Name of manufacturer;
- Serial number;
- Number of passengers and weight of permissible cargo as per the type certificate;
- Maximum certified take off mass;
- Engine type;
- Number of hours flown since new;
- Number of landings since new;
- Number of pressurization cycles since new;
- Date of the last major check and the number of hours flown since then;
- Date of the next due major check;
- Name of company from which the aircraft is being taken on lease;
- Previous details and history of the aircraft, especially details of any incident / accident involving structural damage;
- Name of the authority / country which issued the last certificate of airworthiness.
On satisfying the requirements of Part B (as reproduced above), the “NOC for Import” shall then be granted by the DAT. Once granted, the applicant shall be free to import the aircraft into India.
AIRCRAFT INTENDED FOR PRIVATE USE:
The requirements to get permission to import aircraft for private use varies greatly as opposed to the requirements for aircraft imported for non-private use. The broad requirements are as follows:
- The applicant must first apply to the DGCA for the “In Principle Approval” as stated above, in the same manner as for non-private use aircraft. Apart from satisfying Part I of Annexure “A” of ATC No. 2 of 2017, the applicant must also apply for security clearance as per Annexure “B” and Annexure “C” of ATC No. 2 of 2017. On receipt of the documentation, the same will be forwarded to the Ministry of Home Affairs (the “MHA“). The MHA shall then provide its security clearance to the Owner / Board of Directors of the applicant. On receipt of such clearance, the DAT shall then issue the “In Principle Approval” and forward the same to the Directorate of Airworthiness (the “DAW“). Thereafter, the DAW shall issue a letter recommending issuance of an Import Licence by the DGFT; and
- The applicant must then apply to the DGFT for an “Import Licence” for the purpose of importing the aircraft for private use, on the basis of the “In Principle Approval” accorded by the DAT of the DGCA.
The fee to be paid online (the DGCA has stopped accepting cheque and demand drafts) depends on the weight of the aircraft, for aircraft with an all up weight of less than or equal to 10,000 kgs, the fee is Rs. 1,00,000/- (roughly $USD 1600) while the fee for aircraft with an all up weight more than 10,000 kgs, the fee is Rs. 2,00,000/- (roughly $USD 3200). The DGCA makes an exception in the case of scheduled operators seeking approval for import of aircraft in bulk. It states that such an operator can pay the requisite fee at the time of request for “NOC for Import” of the aircraft and not at the stage of application for “In Principle Approval”.
VALIDITY OF PERMISSION:
Such grant of permission does not stay valid indefinitely, the Government states that validity of such import permission shall be valid for a period of 1 year with the option of a sole 6 month extension, that too only on genuine grounds. There cannot be any extension of the validity of the permission beyond the 1.5 years in case of new applicants however, the DGCA grants some leeway to scheduled operators, for whom it states that the validity of the permission shall be as per the induction plan of the operator.
All the details and more can be found in the text of ATC No. 2 of 2017 which can be found here.
Author: Nitin Sarin
Date: 6th September 2017
Place: Chandigarh, India