India’s federal cabinet is likely to meet next week to decide whether to allow foreign airlines to buy stakes in Indian carriers, a senior civil aviation ministry official said.
“The committee of secretaries has already recommended raising the FDI [foreign direct investment] limits in the sector,” said Civil Aviation Minister Ajit Singh. The panel of ministers also is expected to consider allowing India’s carriers to import jet fuel directly.
A government panel recently recommended allowing foreign airlines to take stakes of up to 49% in domestic carriers, a significant step up from the 26% cap previously proposed by the Department of Industrial Policy and Promotion. Current regulations permit foreign direct investment of up to 49% in Indian carriers, but those rules exclude foreign carriers from investing in the sector.
The proposal to allow foreign carrier investment in India’s aviation industry has been under consideration for almost a decade, but Indian carriers recently have stepped up their lobbying for the change because of the poor financial condition in which a number of the airlines find themselves.