Aviation FDI plan likely on Nov 17

New Delhi: A long pending proposal of the civil aviation ministry, seeking 25% equity investment by foreign airlines in Indian carriers, is scheduled to come up before a high-powered committee on November 17.
The panel is headed by cabinet secretary, K M Chandrashekhar, and comprises secretaries from the ministries of civil aviation, finance, law, industry and home.While civil aviation minister Praful Patel favours a cap of 25% on foreign carriers' equity buying, the Department of Industrial Policy & Promotion is believed to be seeking a much higher 49% cap.
This proposal was first mooted two years back when, along with myriad suggestions on reducing tax burden on ATF and a whole range of other aviation activities, the ministry had quietly inserted this viewpoint in a presentation to be made before the cabinet secretary.
At that time, the ministry had also suggested that the foreign direct investment (FDI) limit of 49% (which is at present allowed for non-airline foreign companies) be relaxed too. It isn't clear whether the meeting of the committee of secretaries (CoS) this time would also consider relaxing the overall 49% FDI limit.
Interestingly, the push for a discussion on FDI in airlines comes just when Jet Airways' proposal to raise $400 million by issuing fresh shares to domestic and foreign institutional investors would breach the 49% FDI cap.
The CoS meeting is happening after Kingfisher Airlines' Vijay Mallya said earlier that foreign carriers were approaching him for equity investments.
06/11/09 Sindhu Bhattacharya/Daily News & Analysis

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Categories: Foreign Nov 2009, Indian Aviation- In General Nov 2009