FICCI-PwC Report Explores India's Leasing Industry

FICCI-PwC report titled, ‘Unveiling opportunities: Exploring India's leasing landscape’, highlights that leasing can play a pivotal role in enabling growth for both private and public sectors. Moreover, it will also enable significant financial inclusion at the micro, small and medium enterprise (MSME) levels. Availing good quality machinery helps in higher realisations, which will enable industries to further take a step towards achieving the goals of ‘Atmanirbhar Bharat’ and ‘Make in India’ initiatives envisioned by the Government.

Rajiv Sabharwal, Chairman, FICCI National Committee on NBFCs and MD & CEO, Tata Capital, said, “The leasing industry in India is at the cusp of transformation, which is being shaped by a multitude of factors that are coming together. These factors include the entry of new players in the market including original equipment manufacturers (OEMs), diversification of asset classes and understanding the benefits of leasing as a financing tool for businesses. The industry is still at a nascent stage when compared to the progress seen in some of the more developed markets such Germany, Australia, Japan, the UK and the US. Conversely, this also indicates that the industry holds tremendous potential for growth in the Indian market as well.”

Mr Sidharth Diwan, Partner – Digital & Strategy, PwC India said, “As India embarks on its journey towards sustainable growth and economic resilience, the leasing market assumes heightened significance. By fostering innovation, facilitating access to capital and promoting efficiency, leasing emerges as a catalyst for economic development and inclusive growth in the country.”

Key highlights of the Report:

• GIFT City: The top-notch infrastructure and business-friendly environment at GIFT City has propelled the leasing industry, enticing both global and domestic companies to establish leasing operations.
• Trends and opportunities: The surge in demand for flexible and cost-effective solutions has fuelled interest in leasing services. Companies can access assets with minimal upfront costs, allowing them to adapt and upgrade as needed. This client-centric approach aligns with circular economy principles, promoting asset reuse and recycling. Leasing is now expanding into diverse sectors, including technology, agriculture and renewable energy, fostering cross-industry collaboration.
• Leveraging technology: The leasing industry is also undergoing a digital transformation, leveraging emerging technologies such as robotic process automation (RPA), data analytics, artificial intelligence (AI), machine learning (ML), blockchain and asset telematics. These innovations streamline processes, enhance risk assessment, and improve customer experiences. With remote asset inspections powered by drones and augmented reality, the industry is poised for a new era of efficiency and improved user satisfaction.
• Sustainability in leasing: The growing interest in sustainable and green leasing is being driven by environmental concerns. Both lessors and lessees are adapting environmentally friendly practices and incorporating environmental clauses, performance benchmarks in leasing contracts, promoting energy efficiency in the leasing industry.