FDI caps in aviation sector raised

New Delhi, Jan 30 (UNI) The Government today permitted foreign direct investment (FDI) up to 74 per cent on the automatic route for non-scheduled airlines, chartered airlines, cargo airlines and ground handling services, besides 100 per cent FDI in helicopter and seaplane services.

It also allowed foreign airlines participation in the air cargo sector, but rejected direct or indirect participation by foreign airlines in non-scheduled airlines and chartered airlines.

According to an official note, the Union Cabinet permitted FDI up to 100 on the automatic route for maintenance and repair overhaul (MRO) facilities, flying training institutes, technical training institutions, and helicopter and seaplane services requiring approval of the Directorate General of Civil Aviation.

It raised the FDI cap from 49 per cent to 74 per cent on the automatic route for non scheduled airlines, chartered airlines and cargo airlines, and on ground handling services, subject to sectoral regulations and security clearance.

Non-Resident Indians (NRI) investment would be allowed up to 100 per cent on the automatic route.

The FDI in air transport services would, however, continue to be capped at 49 per cent on the automatic route and 100 per cent for NRI, subject to no direct or indirect participation by foreign airlines.

This segment would be reclassified as Domestic Scheduled Passenger Airline Sector.

The Government wants to make India an attractive MRO hub, a move that has the support of aircraft manufacturers such as Boeing and Airbus Industries.

Raising the cap to 100 per cent in helicopter and sea-plane services would help not only in connecting far-flung and hilly areas, but also in providing medical emergencies.

UNI YJ MIR AS1655