Aviation FDI policy being closely examined, says PMO

The cabinet secretariat is examining whether there is a need to take a re-look at the policy on foreign direct investment (FDI) in civil aviation sector in the wake of security concerns raised by some MPs, the Prime Minister's Office said in a statement.

The statement is apparently intended to clear the air over the deal for Abu Dhabi's Etihad Airways to buy a 24-per cent stake in India's Jet Airways. The statement said this deal and a bilateral air services agreement between India and the United Arab Emirates were ''two different matters''.

''Being distinct issues and between different categories of entities, the two matters need to be handled separately without mixing them up,'' the statement said.

Some MPs have alleged that Abu Dhabi received far more seats than needed under the bilateral air services agreement as the government wanted to push the Jet-Etihad deal.