India relaxes foreign equity caps in aviation
Wednesday, 30 January 2008, 08:00 Hrs
New Delhi: In a bid to give a major boost to its aviation sector, especially in the cargo and non-scheduled passenger operations, India Wednesday raised foreign equity caps in these two categories to 74 percent. "Foreign direct investment of up to 74 percent may be permitted on the automatic route for non-scheduled airlines, chartered airlines and cargo airlines," said an official statement after a meeting of the central cabinet of ministers here. The foreign equity limit in non-scheduled, chartered and cargo operations was earlier set at 49 percent. "No direct or indirect participation by foreign airlines would be allowed in the non-scheduled airlines and chartered airlines. Non-resident Indian investment will be allowed up to 100 percent on the automatic route," the statement added. The meeting, presided over by Prime Minister Manmohan Singh, has, however, kept the cap on air transport services, or scheduled operations, at 49 percent, even as the ban on equity participation by foreign carriers continues. However, non-resident Indians are allowed 100 percent equity participation in this segment, which would now be reclassified as "domestic scheduled passenger airline sector". In the case of ground-handling services, up to 74 percent foreign equity will be allowed, with 100 percent for non-resident Indians. For maintenance, repairs and overhaul operations, 100 percent foreign equity has been permitted. Similar equity limit has been allowed for flying training institutes, technical training institutions and helicopter and seaplane services, but with the prior approval of the regulator, the Directorate General of Civil Aviation.