Budget 2026: Seaplane manufacturing to get boost, aircraft parts duty cut

Centre announces incentives for indigenous seaplane manufacturing, VGF support for operations, and customs duty exemption on aircraft components

The Centre on Sunday announced incentives to promote indigenous seaplane manufacturing and operational support through a viability gap funding scheme, while also proposing to exempt basic customs duty on components and parts used in civilian aircraft manufacturing.

 

India has so far seen limited and intermittent commercial seaplane operations, and does not have a domestic manufacturing base for such aircraft. Industry executives have cited high costs, regulatory complexity and uncertain demand as constraints.

 

“To enhance last-mile and remote connectivity, and promote tourism, I propose to give incentives to indigenise manufacturing of seaplanes. A Seaplane VGF (viability gap funding) scheme will also be introduced to provide support for operations,” Finance Minister Nirmala Sitharaman said in her Budget speech.

 

India’s first commercial seaplane service began in 2013 in Kerala, flying from Ashtamudi Lake in Kollam, but faced protests and regulatory hurdles and was eventually grounded.

 

Under the regional connectivity scheme UDAN, SpiceJet started seaplane flights between the Sabarmati Riverfront in Ahmedabad and the Statue of Unity in Kevadia, Gujarat, in 2020. However, this service was later discontinued.

 

“I propose to exempt basic customs duty on components and parts required for the manufacture of civilian, training and other aircrafts,” Sitharaman said in her speech.

 

Adani Group and Brazilian aircraft maker Embraer had on January 27 signed a memorandum of understanding (MoU) for setting up a regional aircraft manufacturing facility in India. Both companies are currently checking locations to set up the final assembly line, and a final decision would be taken in the next few months.