Aviation ministry clears 24 per cent FDI in domestic carriers
08 Nov 2011
New Delhi: India's ministry for civil aviation has cleared equity participation by foreign airlines in domestic carriers. Through a letter to the Department of Industrial Policy and Promotion (DIPP), the ministry has recommended easing of FDI rules to allow foreign airlines to invest up to 24% in local carriers within the existing cap of 49% for foreign investors.
''We have communicated our views to DIPP on its proposal to allow foreign airlines to invest in domestic carriers. Our recommendation is for 24% within the limit of 49% permissible for foreign investors," an aviation ministry official said.
He added that Indian carriers needed foreign capital to survive.
The proposal has invited strong opposition from private carriers like Jet Airways and SpiceJet. Financially beleaguered Kingfisher Airlines is, so far, the only carrier in favour of opening up the sector for foreign investment.
Meanwhile, DIPP officials are being quoted as saying that the department is not happy with the aviation ministry's truncated offer of opening investment to the tune of 24%. They are quoted as saying that the sector needs to be allowed to invite FDI to the tune of at least 26%, as below this, it may not be attractive for investors.
Sources said the industries minister, Anand Sharma, may soon take up the issue with aviation minister, Vyalar Ravi, in a bid to fast-track the proposal.
