FIPB to decide on Tata-Singapore Airlines proposal shortly

Officials say proposal is likely to cleared in bid to restore biz confidence

The Foreign Investment Promotion Board (FIPB) will meet shortly today to take a call on the Tata-Singapore Airlines proposal to start an airline.

Officials said the proposal is likely to be cleared as the government wants to revive business confidence, marred by filing of the first information report (FIR) against Aditya Birla group head Kumar Mangalam Birla.

The proposal is to set up a full-service carrier involving foreign direct investment (FDI) of $49 million. Tatas will have a controlling stake of 51% and Singapore Airlines 49%.

The government has allowed foreign carriers to acquire up to 49% of Indian airlines but has specified that control must remain in Indian hands.

It is this hitch which may come at the last movement, otherwise poposal might be cleared, officials said.

According to the new definition of control, it vests with an entity which has the right to appoint majority of the directors or to control the management or policy decisions included by virtue of their shareholding or management rights or shareholders agreements or voting agreements.

Besides the Singapore Airlines' proposal for the tie-up with the Tatas, the FIPB is scheduled to take up 29 other foreign investment applications.

Pharma sector FDI proposals include those from Castleton Investment Ltd, Mauritius and GlaxoSmithKline Pte Ltd, Dastag UK, Perrigo API India Pvt Ltd and Intas Pharmaceuticals.

The FIPB will also take up an application of SingTel Global (India), an arm of Singapore-based telecom firm SingTel. The agenda includes proposals from MY Mobile Payment, DLF Limitless Developers, Religare Enterprises, DA Vinci GmbH, and Federal Bank.

FDI into India grew by 20% to $7.05 billion in the April-July period from $5.9 billion a year earlier, according to official data.