Industry welcomes relaxation of equity caps in aviation

New Delhi: The aviation industry has welcomed the government's move to raise foreign equity limit in cargo and non-scheduled operations but opinion is divided on the ban on foreign carriers from holding stakes.
'The revision in equity limit was very much required for the growth of India's aviation sector,' said Kapil Kaul, the chief executive for the India chapter of industry think tank, Centre of Asia Pacific Aviation.
'It is strategically important also,' Kaul told IANS, after the union cabinet Wednesday decided to raise foreign equity caps in cargo, non-scheduled and chartered operations to 74 percent from the existing 49 percent.
The meeting, presided over by Prime Minister Manmohan Singh, however, kept the cap on air transport services, or scheduled operations, at 49 percent, even as the ban on equity participation by foreign carriers continued.
In the case of ground-handling services, up to 74 percent foreign equity will be allowed, with 100 percent for non-resident Indians. For maintenance, repairs and overhaul operations, 100 percent foreign equity has been permitted.
Similar equity limit was allowed for flying training institutes, technical training institutions and helicopter and seaplane services, but with the prior approval of the regulator, the Directorate General of Civil Aviation.
30/01/08 India PRwire (Press Release)

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