FDI cap may be raised for chopper services, charters and regional airlines

The department of industrial policy and promotion (DIPP) is likely to approve an increase in the foreign direct investment (FDI) ceiling to 74 per cent in helicopter services, chartered service operators and regional airlines.

The finance ministry has recommended the proposal from the civil aviation ministry. If approved by the cabinet, the proposed policy change may be announced as early as next year.

The increase in FDI would help greater connectivity for remote areas, DIPP sources said. The civil aviation ministry feels an upward shift in FDI cap would significantly boost the feeder airline business, which is presently getting short shrift.

Union civil aviation minister Praful Patel has said that there is a need to encourage non-scheduled operations and helicopters services by opening them up.

The domestic civil aviation industry needs an investment of $150 billion in the next 10 years. The number of aircraft in the country is expected go up from 300 to 1,000 by 2020. The civil aviation ministry favours a hike in the FDI ceiling for five sub-sectors of the aviation industry - maintenance, training facilities, cargo handling, passenger handling and chartered services - from 49 per cent to 100 per cent.

FDI guidelines would be progressively liberalised and the FDI caps in various segments of civil aviation would be reviewed from time to time to cater to the growing needs of the sector, the new civil aviation policy draft says.