Equipment Leasing by Industry in India: What to Lease and How to Structure It
How manufacturers, clinics, restaurants, logistics operators, hotels and IT firms typically structure an equipment lease: which assets to lease, dry or wet, and the tax points that differ by sector.
The right lease depends on the industry: quick-ageing equipment such as IT hardware and kitchen kit suits a dry operating lease, equipment where downtime is costly such as medical devices and forklifts suits a wet operating lease, and long-life core machinery that you plan to keep can suit a finance lease. This guide goes through the common sectors, what each typically leases, the structure that tends to fit, and the points that differ for tax. For the mechanics of dry, wet, operating and finance leases, start with the finance lease vs operating lease guide.
Industry at a glance
| Sector | What is typically leased | Structure that usually fits |
|---|---|---|
| Restaurants and cloud kitchens | Kitchen lines, refrigeration, freezers, chimneys, ovens, POS | Operating, dry (wet service as an add-on) |
| Healthcare and diagnostics | MRI, CT, ultrasound, ventilators, analysers, dialysis | Operating, wet |
| Manufacturing and MSME | CNC machines, moulding, packaging lines, compressors, general plant and machinery | Operating, dry; finance for a long-life core machine you want to own |
| Hospitality and fit-out | Furniture, fixtures, fit-out, audio-visual | Operating, dry |
| IT and offices | Laptops, desktops, servers, networking, printers | Operating, dry, 24 to 36 months |
| Logistics | Forklifts, reach trucks, pallet movers, conveyors | Operating, wet |
Use the table as a starting point. Your own mix of cash, usage and plans for the asset decides the final choice.
Restaurants and cloud kitchens
Kitchen equipment ages quickly and a busy kitchen runs it hard, so a dry operating lease fits the refresh cycle. You keep cash for the next outlet instead of tying it up in refrigeration and ovens. For a high-volume location where downtime hurts, ask about adding service on a wet basis.
One tax point is different here. A restaurant's output is food and beverage, and input credit on GST is blocked for businesses in that position. That means the GST on lease rentals may not be recoverable and could be a real cash cost. The case for leasing in a kitchen then rests on conserving cash and on the rental being a business expense, not on GST neutrality. Do the comparison with that in mind and confirm the position with your accountant.
Healthcare and diagnostics
Medical technology moves fast, and a hospital or lab usually wants the machine working, not the burden of maintaining it. A wet operating lease fits well: the device, maintenance, consumables and a technician in one monthly figure, so you buy uptime and not an asset.
Three things are specific to this sector:
- GST on medical devices. The rate on medical devices was cut from 12 percent to 5 percent from 22 September 2025. Rates differ by asset, so confirm the exact rate for your device.
- Depreciation rates differ by device. Listed life-saving equipment, such as MRI machines, ventilators and defibrillators, depreciates at 40 percent. Other medical equipment that is not on that list depreciates at the general 15 percent rate. This matters because fast-depreciating assets can make a purchase or finance lease competitive on tax timing.
- Input credit depends on your services. Diagnostic labs making taxable supplies can generally claim input credit on rentals. Hospitals providing GST-exempt services may have credit that is partly or fully blocked. Know your own mix before relying on a credit.
Manufacturing and MSME
General plant and machinery, such as CNC machines, moulding equipment, packaging lines and compressors, depreciates slowly, at 15 percent on a written-down basis. For slow-depreciating assets, the full rental deduction under an operating lease tends to be the stronger tax position in the early years, compared with depreciation spread over many years. For a taxable manufacturer, GST on rentals is generally creditable and so close to neutral.
An MSME under bank-borrowing pressure often benefits most from leasing, because a lease keeps the working-capital limit free for inventory and receivables. Where a promoter wants to own a long-life, specialised machine for good, a finance lease is the better fit, as it ends with the machine being yours.
Hospitality, real estate and fit-out
Furniture and fixtures depreciate at only 10 percent, so a hotel buying them can take roughly six to seven years to shield even half the cost. An operating lease gives the full rental as a deduction as you go and a clean refresh at the end, without disposal headaches. Operating dry is the usual structure.
Distinguish movable equipment from construction. Credit on movable fit-out is generally available to a hotel making taxable supplies; credit on construction and immovable works is blocked. Check how each item is classified.
IT and offices
Computers depreciate quickly, at 40 percent, but they also become outdated in two to three years. An operating lease handles both problems: the rental is a business expense, and at 24 to 36 months you return the hardware and move to current models, with no resale to organise. Where a business wants to own the machines, or where the 40 percent depreciation is attractive, a finance lease can match or beat an operating lease on tax timing, so it is worth comparing with your accountant.
Logistics
Forklifts, reach trucks, pallet movers and conveyors work hard, and when one is down, revenue is lost. A wet operating lease turns uptime into a fixed monthly cost: maintenance, spares and an operator in one figure, instead of a variable repair budget. Depreciation for general plant and machinery is 15 percent, so the operating-lease deduction timing generally favours leasing.
Textiles, food processing and other inverted-duty businesses
Some sectors pay 18 percent GST on most inputs but charge 5 percent on their output, so they build up unused input credit. Lease rentals add to that pool. For these businesses the value of leasing is not in recovering GST; it is in freeing cash and protecting credit lines, along with the rental being a business expense. Lead with those when you evaluate it.
Freeing cash that is locked in equipment you already own
Some businesses already own plant, vehicles or machinery that holds a lot of cash. A sale-and-leaseback lets you sell that asset to the lessor and lease it straight back, so the equipment keeps working while the cash is released. It is useful for a business with capital tied up in owned assets.
It has to be a genuine sale: a real transfer of title and possession at a fair price supported by a valuation, and a separate lease agreement at market-level rentals. Tax treatment depends on how it is documented, so involve your accountant before you proceed.
How to choose, whatever your sector
Ask these questions in order:
- How quickly will this asset age? Quickly points to an operating lease; slowly points to a finance lease if you want to own it.
- How costly is downtime? If very, ask for a wet lease.
- Do you want to own it at the end? If yes, say so now so a finance lease can be structured. An operating lease never promises ownership.
- Can you recover GST on the rentals? For most taxable businesses yes; for some sectors, no, and that changes the comparison.
- What does your accountant say for your asset and tax position? Depreciation rates and credit rules vary by asset and business.
When you are ready, the step-by-step guide shows how a lease moves from enquiry to delivery, the maintenance and insurance guide explains who looks after what, and the GST and TDS guide covers the tax mechanics. The equipment leasing FAQ answers the quick questions, and the overview of equipment leasing in India gives the wider picture.