DIPP backs foreign carriers' stake in Indian airlines

New Delhi: The chances of getting a slice of action in India's aviation sector brightened with the country’s foreign rulemaker saying it is not averse to global players picking up stake in local airlines.
“Why should we come in the way?” said an official with the (DIPP), saying the onus rests with the civil aviation ministry to take the issue forward. “Big airlines are making losses and need equity, while there are no investors,” he said, adding is waiting for the civil aviation ministry to give a signal.
The government has, so far, been unable to come up with a coherent policy, despite a broad consensus in the industry on the issue. Civil aviation minister had said the government was not prepared to allow foreign airlines at this stage, although he has been in favour of such a move. He had said there was not much action on the issue at DIPP. “It is now for the group of ministers on aviation to take a call on the policy,” said Mr Patel, when told about DIPP’s position on the issue.
The current policy allows foreign direct investment of up to 49% in Indian airline firms, but bars foreign carriers from buying stake. With the most suitable foreign investors being kept out, no local airline has managed to rope in strategic partners.
02/10/10 Anindya Upadhyay/Economic Times

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