Thursday, May 25, 2017

100% FDI in Airlines Poses Threat To National Security

Allowing 100% foreign direct investment (FDI) in scheduled Indian carriers could poses a serious “security threat” to the country’s “national security”, the Federation of Indian Airlines (FIA) has told the government.

FIA has termed the government’s decision to relax the foreign investment norm to 100% as “unprecedented” in its latest salvo against the move. The decision on FDI has not only left the aviation industry bewildered but even many in the government have questioned the move.

FIA consists of IndiGo, SpiceJet, Jet Airways and Go Air, which have a combined domestic market share of around 80%.

“By India permitting 100% FDI in scheduled airlines, the Indian government will have no visibility on where control lies. Such a move could also have serious repercussions on India’s national security,” FIA said in a letter earlier this month.

“Such foreign owned and controlled ‘’Indian’’ airlines will also gain unhindered access to defence airfields in India. In this connection, it is also pertinent to note that countries, whose diplomatic relations with India are strained, may also use this window (of opportunity) to gain access to India,” it pointed out.

The FIA has argued that “no substantive country” allowed 100% FDI in airlines. “While the purported objective appears to be to bring in substantial investment into India, in fact, little or no investment will result from this, In addition, this decision will result in permanent damage to the domestic aviation industry and to India’s aim of building global international hub airports and global airlines in India. This decision has the potential to create permanent foreign monopolies on key routes into and out of India to the detriment of the Indian consumers.”
25/05/17 Defence Aviation Post

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