India open to Branson investment proposal

Monday, 29 November 2004, 08:00 Hrs
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NEW DELHI: The Indian government could consider British billionaire Richard Branson's plans to invest in an Indian airline provided he applies as an individual, a senior official said.

Civil Aviation Secretary Ajay Prasad said Branson's ownership of Virgin Atlantic airlines need not be a barrier in his investing in an Indian carrier, as he had multiple ventures.

On the sidelines of a meeting of the Cooperative Development of Operation Safety and Continuing Airworthiness, Prasad said any proposal by Branson would be examined and a decision taken according to guidelines.

"If a person has a number of business interests including an airline and wants to invest in an Indian airline, it need not be seen as an investment from an airline," Prasad told reporters.

Foreign individuals and financial institutions, but not foreign airlines, can buy up to a 49 percent stake in Indian carriers. However, Prasad asserted that foreign airlines were not allowed to invest in an Indian airline.

"We have to study any proposal to see whether it is a surrogate or legitimate investment," said the official. "Every case for foreign direct investment is taken up separately."

He said he could recall no precedent from which to draw from.

Branson had announced Saturday he was looking to buy a 25 to 49 percent stake in an Indian airline and was talking to two existing Indian carriers to buy stakes and two others that were poised to launch services shortly. He did not say when an agreement might be reached.

He said the investment would be made by him personally to get around Indian regulations that prevent foreign carriers from buying stakes in local airline firms.

Branson's Virgin business empire stretches from planes and trains to vodka, music, personal finance and telephones.

Source: IANS
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