CCEA to take up FDI by foreign airlines

The Cabinet committee on economic affairs (CCEA) is likely to take up the issue of allowing foreign airlines to buy up to 49 per cent stake in Indian carriers

Written by ENS Economic Bureau | New Delhi | Published:September 14, 2012 12:34 am

The Cabinet committee on economic affairs (CCEA) is likely to take up the issue of allowing foreign airlines to buy up to 49 per cent stake in Indian carriers on Friday.

“It is listed (in the agenda),” commerce and industry minister Anand Sharma told reporters here when asked about allowing foreign direct investment (FDI) by foreign airlines.

The Department of Industrial Policy and Promotion had earlier opposed civil aviation ministry’s proposal to allow foreign carriers to buy 24 per cent in Indian carriers.

The proposal was later revised to allowing foreign carriers to buy up to 49 per cent in the Indian carriers,which was accepted by the finance and civil aviation ministries.

Currently,India allows foreign investors,not related to airline business,to buy up to 49 per cent stake in domestic airlines,but foreign carriers are not permitted to invest in them.

Allowing foreign airlines to buy stake in domestic carriers is one of the big ticket reforms the industry has been demanding,arguing that it will improve the investment climate in India.

The move is likely to benefit debt-ridden Kingfisher Airlines,which is burdened by a debt of over Rs 7,000 crore and losses of over RS 6,000 crore. Kingfisher Airlines and SpiceJet has been reported to be talking to international carriers for a stake sale.

GoAir has not yet expressed its views on FDI in aviation. However,Jet Airways and low-cost carrier IndiGo are opposed to it.

The proposal,which is being actively discussed for a year now,has been stuck due to opposition from ally Trinamool Congress (TMC).

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