The Centre for Asia Pacific Aviation (CAPA) has strongly advocated for last 10 years that foreign airlines should be allowed to invest up to 49 per cent in Indian domestic carriers. Our regulations with respect to FDI have been unique in the world - we have excluded one class of investor that has the greatest strategic interest to develop the sector. This regulatory anomaly existed for more than 16 years.
CAPA welcomed the decision to allow foreign airlines to invest up to 49 per cent in Indian carriers in September 2012 and expects it to be a game-changer that will positively impact the entire value chain. Foreign airlines will bring in strategic capital and expertise. Other forms of institutional funding will follow, further strengthening the sector.
Allowing in foreign airlines, though, will not solve the deep structural problems of the Indian aviation sector. We need a comprehensive policy and regulatory framework which is transparent and aligned to the needs of the sector. Moreover, this framework should not be at the discretion of a few people, which, unfortunately, has been the case since the early 90s.
07/03/13 Kapil Kaul/Business Standard
