Govt to decide on FDI by foreign airlines
New Delhi: Moving ahead with its proposal to provide relief to the cash-strapped aviation industry, the government today said it will "very soon" take a call on allowing foreign airlines to pick up stake in Indian carriers. "This has been discussed with the Finance Minister, the Civil Aviation Minister and myself and an appropriate view and decision will be taken very soon," Commerce and Industry Minister Anand Sharma told reporters on the sidelines of `Hero Mindmine Summit` here.
In his budget speech, Finance Minister Pranab Mukherjee said a proposal to allow foreign airlines to participate up to 49 per cent in domestic carriers is under active consideration of the government. At present, FDI up to 49 per cent is permitted in the airline sector in India, but foreign carriers are not allowed to buy stake due to security reasons. India`s financially troubled civil aviation sector grew at 18.5 per cent in the last seven years and the government has taken various steps to resolve the woes faced by airline industry, the Economic Survey for 2011-12 had said.
Kingfisher Airlines has slipped into a crisis and has total debts of more than Rs 7,000 crore. Indian banks have no plans for another round of debt restructuring for cash- strapped Kingfisher Airlines. Looking into the demands of the cash-strapped aviation industry, the government had on January 17 decided to launch the process to allow foreign airlines 49 per cent stake in Indian carriers.
This was decided at a meeting between Mukherjee and Civil Aviation Minister Ajit Singh. The Civil Aviation Ministry thereafter circulated a Cabinet note on the matter. Allowing foreign airlines to pick up stake in Indian carriers would mark a major policy shift.