Govt to clear 24% FDI in airlines: reports
19 Oct 2011
New Delhi: Reports now circulating in media circles suggest that the ministry of civil aviation may have provided an in-principle approval for foreign airlines to pick up 24% stake in domestic carriers.
Under current norms, foreign direct investment (FDI) in aviation is allowed up to 24%, but it is for companies, other than airlines. Reports quote ministry of civil aviation sources as saying the move to allow FDI in airlines is likely to be a game changer for the Indian aviation sector.
The change in policy will particularly help cash strapped carriers who will now be more likely to generate funds through stake sales and reduce their debt burden. For a sector that is bleeding as heavily as aviation, even banks are now wary of extending loans.
Reports suggest that the aviation ministry will likely communicate their decision to department of industrial policy and promotion (DIPP), which is then expected to prepare a draft note with the inputs from the ministry.
Thereafter the policy document will then go to the union cabinet for approval.
