UPSC CURRENT AFFAIRS – 04th April 2025

Home UPSC Current Affairs Lok Sabha passes Aircraft Objects and Coastal Shipping Bills

Lok Sabha passes Aircraft Objects and Coastal Shipping Bills

Why in News?

The Protection of Interests in Aircraft Objects Bill, 2024, ensures faster repossession of leased aircraft by international lessors, while the Coastal Shipping Bill, 2024.

Introduction

The Lok Sabha recently passed two key legislations—the Protection of Interests in Aircraft Objects Bill, 2024, and the Coastal Shipping Bill, 2024—through a voice vote.
These bills aim to strengthen India’s aviation and maritime sectors by enhancing investor confidence in aircraft leasing and promoting coastal shipping as an efficient mode of freight transport.

Protection of Interests in Aircraft Objects Bill, 2024

Objective:

To protect the interests of international lessors and financiers by ensuring quick repossession of aircraft in case of airline defaults.
To align Indian aviation regulations with the Cape Town Convention and improve India’s compliance score, which affects leasing costs.

Background and Need:

The bill was introduced in response to challenges faced by international aircraft lessors in retrieving their aircraft when Indian airlines defaulted on lease payments.
Case Studies:
- SpiceJet (2015): Lessors were unable to repossess aircraft due to a lack of legal provisions.
- Jet Airways (2019): Lessors retrieved aircraft before insolvency proceedings began.
- Go Air (2023): Aircraft were not returned to lessors, leading to India’s compliance score drop in the Cape Town Convention index.

Key Provisions:

Empowers lessors to take back aircraft swiftly in case of payment defaults.
Ensures DGCA (Directorate General of Civil Aviation) has the legal authority to deregister aircraft upon default.
Prevents aircraft from being stuck in insolvency proceedings, thereby reducing risks for international lessors.

Expected Impact:

Lower leasing costs for Indian airlines, leading to reduced airfares.
Boosts investor confidence, encouraging more aircraft leasing deals.
Supports India’s growing aviation sector, with airlines ordering 1,700 new aircraft to meet rising demand.

Coastal Shipping Bill, 2024

Objective:

To regulate and promote coastal shipping within India’s territorial waters.
To increase the share of coastal shipping in freight movement, reducing dependence on road and rail transport.

Background and Need:

Despite India’s 11,098 km long coastline, coastal shipping accounts for only 5% of total freight movement.
Comparatively, the European Union (EU) uses coastal shipping for 40% of freight, highlighting India’s underutilization of this mode.
Currently, 66% of freight moves via roadways, 31% via rail, and only 5% via coastal shipping, leading to high transportation costs, pollution, and congestion.

Key Provisions:

Simplifies regulatory processes for vessels engaged in coastal trade.
Encourages investment in coastal shipping infrastructure.
Promotes coastal shipping as a cost-effective and environment-friendly alternative to road and rail transport.

Expected Impact:

Lower transportation costs for industries dependent on freight movement.
Reduced congestion on road and rail networks.
Job creation in the maritime sector, boosting economic growth.
Lower carbon emissions, contributing to environmental sustainability.

Conclusion

The passage of these two bills marks a significant step toward enhancing India’s civil aviation and maritime sectors.
While the Aircraft Objects Bill will improve India’s standing in global aviation leasing, the Coastal Shipping Bill is expected to boost trade efficiency and reduce logistics costs.
Successful implementation of these legislations will contribute to India’s broader goals of economic growth, investment attraction, and sustainable transport development.