India considers allowing FDI in pax carriers

India's government is studying a proposal to allow foreign airlines to invest in domestic passenger carriers - something that is already allowed for cargo carriers - a move that could offer vital assistance to cash-strapped Indian airlines.


Department of Industrial Policy and Promotion DIPP FDI foreign airlines government India Indian Airlines


India’s government is studying a proposal to allow foreign airlines to invest in domestic passenger carriers – something that is already allowed for cargo carriers – a move that could offer vital assistance to cash-strapped Indian airlines. “Though the aviation ministry has given an in-principle approval, the sectoral cap will be decided by the Cabinet,” said an official of the Department of Industrial Policy and Promotion  (DIPP).

 

While DIPP favours a 26 per cent cap on foreign airlines’ holding, the aviation ministry wants it restricted to 24 per cent as a holding above 25 per cent gives the right to block ‘special resolutions’. India allows 49 per cent FDI in airlines, but in practice this has never been allowed.