FIPB clears Tata airline proposal

NEW DELHI, January 17: The Foreign Investment Promotion Board today cleared the proposal of Tatas to start an airline in India with a 40 per cent foreign equity holding. The proposal has now been forwarded to the Cabinet Committee on Foreign Investment , official sources said today. The Tatas intend to fly a domestic airline with an equity capital of about Rs 1,600 crore, with a 40 per cent holding by foreign institutional investors FIIs.

Sources said the proposal conformed to the existing aviation policy announced last year by the civil aviation ministry. The aviation policy allows foreign investment in domestic airlines as long as investors are not airlines themselves.

According to sources, civil aviation officials plan to ask the Tatas to furnish a list of names of financial institutions which would together pick up a 40 per cent stake in the airline. The ministry feels that the company should forward a list of FIIs to ensure that the proposal remains within the ambit of the aviation policy guidelines.