More wait for foreign airlines to pick up stake in domestic carriers

New Delhi: Foreign airlines will have to wait for some more time to know whether they will be allowed to invest in Indian carriers.
Official sources told Business Line that the proposal is not being “actively” considered by the Government just yet. At the moment, foreign airlines are not allowed to invest either directly or indirectly in domestic carriers. This was not the case in the early 1990s when foreign airlines were allowed to pick up a stake in domestic carriers, a move which saw some West Asian airlines invest in Jet Airways when it was set up.
When the Government reversed the policy, Jet Airways brought back the stake which the foreign airlines had in it.
Earlier this year, the Ministry of Civil Aviation had proposed that foreign airlines be allowed to acquire a 25 per cent equity of the 49 per cent FDI cap currently in place in the domestic airline industry. The proposal, which has been sent to the Commerce Ministry for a final decision, is part of a larger attempt being made by the Government to make India a more favourable destination for foreign investments.
21/12/09 Ashwini Phadnis/Business Line

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