Finance Ministry bats for foreign airlines

New Delhi: The finance ministry appears to be pushing for equity participation by foreign airlines in Indian aviation companies. The ministry has said the final policy in this regard must include investment options by foreign airlines in domestic carriers.
While 49% FDI is allowed in domestic airlines, direct or indirect investment by foreign airlines is not permitted. The draft policy has preferred to remain silent on this issue even though it has mooted a higher FDI limit in domestic airline companies.
Commenting on the draft aviation policy, the department of economic affairs (DEA) said: “In the first draft (NCAP), it had been indicated that even though FDI in domestic airlines has been restricted to 49%, direct or indirect investment by foreign airlines, which is not permitted now, would be considered in due course. However, in the latest draft, this provision has been removed. We believe that the intent of the government to consider this aspect in the future ought to be stated in the policy.”
DEA is supported by its other arm, department of expenditure (DoE).
16/08/07 Nirbhay Kumar/Economic Times

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Categories: Foreign Aug 2007