Govt cold to Mallya's FDI proposal

New Delhi/Mumbai: The civil aviation ministry has said it will reject Kingfisher Airlines Chairman Vijay Mallya’s demand for allowing foreign airlines acquire stakes in Indian carriers.
“We have no knowledge of any such letter written by Mr Mallya. However, the ministry’s stance is the same. The Indian civil aviation industry is still at a nascent stage and foreign airlines will not be allowed to pick up stake in any Indian carrier,” said a civil aviation ministry official.
The civil aviation policy caps foreign direct investment (FDI) in the domestic aviation industry at 49 per cent, barring sectors like cargo, maintenance repair and overhaul, and ground-handling at airports. It does not allow direct or indirect investment by foreign carriers.
To make the change Mallya has demanded, the government will have to incorporate it in the proposed aviation policy. The draft policy, being considered by a Group of Ministers (GOM) headed by External Affairs Minister Pranab Mukherjee, does not mention changes in FDI limits on scheduled airline companies.
Mallya yesterday said that he had written to the ministry to allow foreign carriers have a strategic investment of up to 25 per cent in domestic airlines.
27/09/08 Economic Times

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Categories: Foreign Sep 2008, Indian Aviation- In General Sep 2008, Kingfisher Sep 2008