The government on Sunday ruled out raising the 49 per cent foreign direct investment (FDI) cap in the Indian aviation sector.
“I don’t think so. Because the 1934 Civil Aviation Act says management has to be in Indian hands, majority of directors have to be Indians. Whatever worries people have, government will still decide the routes, government will still give at what time they fly and where,” Civil Aviation Minister Ajit Singh said.
“Now, they have all changed.
It is a capital-intensive industry... they are not getting even working capital. FDI is already allowed.
We are not asking anybody to take it. It is not compulsory. Those who do not want it, fine,” he said when it was pointed out that some airlines favoured raising the 49 per cent FDI cap.
India allows FDI in domestic airlines up to 49 per cent but had been disallowing foreign airlines from investing in the sector.
The government, however, is now planning to allow foreign airlines to pick 49 per cent stake in their Indian counterparts.
The ruling coalition partners are also being brought on board on the issue of FDI in aviation, Singh said on the sidelines of a book release function in Hyderabad on Sunday.
