Mumbai, Oct 6 (PTI) Aviation Working Group (AWG) on Friday placed India with a positive compliance outlook, days after the government exempted aircraft objects from the ambit of insolvency law moratorium.

The Group's action would be a positive step towards ease of leasing/financing aircraft equipment to Indian operators.

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AWG -- a not-for-profit legal entity comprised of major aviation manufacturers, leasing companies and financial institutions had on September 27 cut India's rating score in the CTC Compliance Index to 2 from 3.5, with a negative outlook.

AWS maintains the CTC Compliance Index.

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On October 3, the corporate affairs ministry, through a notification, exempted aircraft objects registered in the international registry from the applicability of the moratorium under the IBC.

The exemption made under the Insolvency and Bankruptcy Code (IBC) came against the backdrop of various aircraft lessors launching legal battles to repossess planes leased to the grounded Go First, which stopped flying since early May, and is undergoing an insolvency resolution process under the IBC.

"As a consequence of this development (notification), AWG issued a positive watchlist notice in their CTC (Cape Town Convention) compliance index with projected increase in India's score. It would be a positive step towards ease of leasing/financing aircraft equipment to Indian operators," the ministry said in a statement.

In a statement on Friday, the civil aviation ministry said the notification was in consonance with the treaties and conventions India is party of with regards to civil aviation.

India is already a signatory of The Convention on International Interests in Mobile Equipment (Cape Town Convention), where the Convention on International Interests in Mobile Equipment on Matters specific to Aircraft Equipment were adopted.

The adoption was done under the joint auspices of International Civil Aviation Organization (ICAO) and the International Institute for the Unification of Private Law concluded at Cape Town on November 16, 2001.

The notification is also in compliance with the other convention that India is signatory of, the Convention and the Protocol from the International Institute for the Unification of Private Law.

The ministry asserted that India is committed to keeping lessors' confidence in the Indian aviation market intact by reducing their risks.

India is a signatory of CTC but is yet to ratify the convention.

Under the Cape Town Convention, lessors can take back the possession of aircraft leased to airlines.

AWG includes Boeing and Airbus.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)