FDI in aviation up for review

New Delhi: The Manmohan Singh government is looking afresh at relaxing the caps on foreign direct investments in airlines, retail and defence.
Sources said the government could allow FDI in the back-end of food retail. Multi-brand retail in select metros could be opened up.
The government is also thinking of relaxing the norms for airlines. Though FDI up to 49 per cent is allowed, foreign airlines cannot pick up a stake, even indirectly.
Sources said the PMO, the finance ministry and the Planning Commission have long supported minority stakes by foreign airlines.
Several carriers, including Vijay Mallya’s Kingfisher, have lobbied for the move; others such as Jet have opposed the entry of foreign players.
Mallya’s Kingfisher was reported to have received offers from Virgin and British Airways.
Global aviation body IATA wants India to allow foreign investment, which will improve the efficiency of the local players. Though the industry has grown at a rapid pace, it has been accused of being tardy on safety norms.
07/07/10 Jayantha Roy Chowdhury/The Telegraph

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Categories: Foreign Jun 2010, New Jul 2010