Govt in no hurry to clear airline FDI

New Delhi: The government seems to be in no hurry to bring in foreign carriers as stakeholders in Indian airlines.According to sources, the ministry of commerce and industryis not keen to push for this clause, despite the ministry of civilaviation having recommended up to 25% stake acquisition by foreign carriers.
Sources said the previous commerce minister was keen on the issue, but "the present one does not seem to favour any foreign airlines picking up stake in Indian ones... this proposal is on cold storage for now." Under the earlier dispensation, the commerce ministry was said to have been favouring a 49% cap on foreign airlines investing in Indian ones.
In a draft press note releasedon Thursday, the commerce ministry indicated its reluctance on the issue. "No foreign airlines would be allowed to participate directly or indirectly in the equity of an Air Transport Undertaking engagedin operating Scheduled, Non-Scheduled, and Chartered airlines", though they are allowed to takeequity in companies operatingcargo airlines, helicopter and seaplane services. This draft would be reviewed in September 2010,so no change in regulations is likely till then.
The proposal on foreign airlines was first mooted two years back, when, along with myriad suggestions on reducing the tax burdenon aviation turbine fuel and a
range of other aviation activities, the civil aviation ministry hadinserted the proposal in a presen-tation to be made before the cabinet secretary.
25/12/09 Sindhu Bhattacharya/Daily News & Analysis

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