The civil aviation industry has welcomed recent decisions such as 49 per cent FDI limit for global airlines, direct import of aviation turbine fuel, opening up bilaterals to domestic airlines, ECB for working capital loans and removal of import duties for spares.
Volatile crude oil prices, ATF taxes, rupee devaluation and high interest rates continue to hurt. Excessive taxes on maintenance, repair and overhaul have pushed business out of India with the collateral loss of jobs, revenue and government taxes. Air cargo and general aviation are lagging. The concept of retrospective taxation has created concern.
For aviation to thrive, India has to be regarded as an attractive destination for business and tourism. An inter-ministerial group needs to be set up to address that. Taxes on ATF, air tickets and MRO need to be rationalised. Aerospace manufacturing, smaller airports and aviation training need to be supported.
India is an aviation superpower waiting to happen. But a lot remains to be done.
23/04/12 Business Line
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