Civil Aviation Minister Praful Patel recently informed the Lok Sabha that the policy on foreign equity participation in the domestic air transport services has been revised with effect from January 31, 2008. The present limit of Foreign Direct Investment (FDI) in aviation sector is as under:
Airports:
Greenfield Projects: FDI up to 100 per cent is allowed under the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation. Existing Projects: FDI up to 100 per cent is allowed, however beyond 74 per cent FDI, approval of Foreign Investment Promotion Board (FIPB) is required and also subject to sectoral regulations notified by Ministry of Civil Aviation.
Air Transport Services:
(i) Scheduled Air Transport Service/Domestic Scheduled Passenger Airline: FDI up to 49 per cent and investment by Non-Resident Indians (NRI) up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation and no direct or indirect participation by any foreign airlines.
(ii):Non-Scheduled Air Transport Service/ Non-Scheduled airlines, Chartered airlines and Cargo airlines: FDI up to 74 per cent and investment by Non-Resident Indian (NRI) up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation and no direct or indirect participation by any foreign airlines in Non-scheduled and Chartered airlines. Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines.
(iii) Helicopter services/seaplane services – FDI up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation and approval of Directorate General of Civil Aviation (DGCA). Foreign airlines are allowed to participate in the equity of companies operating Helicopter and Seaplane Services.
Other services under Civil Aviation Sector:
(i) Ground Handling Services: FDI up to 74 per cent and investment by Non-Resident Indians (NRI) up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation and security clearance.
(ii) Maintenance and Repair Organisations – FDI up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation.
(iii) Flying training Institutes and Technical Training Institutions – FDI up to 100 per cent is allowed on the automatic route subject to sectoral regulations notified by Ministry of Civil Aviation and approval of DGCA.
The proposal to allow foreign airlines to invest in domestic airline is being examined.