Mumbai: The ministry for civil aviation has proposed to the government that foreign airlines not be allowed to invest more than 24 per cent in domestic carriers, according to civil aviation minister Vayalar Ravi. He was speaking to a TV news channel.
India allows up to 49 per cent foreign investment in Indian carriers but prevents foreign airliness from owning a stake.
With most carriers bleeding financially because of high costs and debt in a restrictive aviation market, the government is now moving to change regulations.
"FDI (foreign direct investment) is acceptable till a limited point. That limited point is still under debate," Ravi said in the televised interview.
"The proposal of my ministry is less than 26 per cent," he said, adding the final decision will be taken by the cabinet. It is well known that the aviation ministry has asked for a 24 per cent cap.
The ministry for civil aviation differs from the Department of Industrial Policy and Promotion (DIPP), the nodal agency that clears such proposals with the consent of concerned ministries, on the quantum of stake that foreign airlines should be allowed in domestic carriers.