Finance, Commerce lock horns on FDI limit in aviation

Even as private players in India's ailing airline business scout around for foreign partners to bail them out, strenuous lobbying efforts by them to have foreign investment limits in the aviation sector hiked to 75 per cent from 49 per cent have run smack into inter-ministerial turbulence.
With some of the biggest players in the Indian aviation industry leaning on the government to liberalise the sector and allow greater infusion of foreign funds, the Finance Ministry recently asked the Department of Industrial Policy and Promotion (DIPP) in the Commerce and Industry Ministry to move a proposal seeking to hike the FDI limit in the sector from 49 per cent to 75 per cent.
The suggestion has not found favour with the Commerce Ministry, which is reluctant to move on the issue. Commerce Ministry wants the Finance Ministry to take the lead and send a proposal in writing, to which it would then respond after examining it. “We had long ago proposed a hike in FDI limit in the aviation sector but at that time the Finance Ministry had turned it down. Now suddenly they are pressing for such a proposal and want us to move it, which is not the right approach. The onus is on them to do the needful if they want action on this front,” a senior official said.
25/03/10 The Hindu

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Categories: Foreign Mar 2010, Indian Aviation- In General Mar 2010