Union Aviation Minister Ajit Singh has said that India allows foreign airlines to invest as much as 49 per cent stake in local airline firms regardless of whether the investment is made before a joint venture is formed or after. Singh was instrumental in permitting foreign carriers to invest in local airlines by amending the existing foreign direct investment rules, as part of efforts to help local airlines get much-needed funds.
Singh said in Mumbai that on March 6, the Finance Ministry overruled the reservations of the Aviation Ministry to clear a proposal submitted by AirAsia Bhd and the Tata group to start IndiaÂ’s eighth passenger airline with an initial investment of $14.5 million (around Rs 80 crore). AirAsia will have a 49 per cent stake in AirAsia India while Tata Sons will hold 30 per cent and Arun Bhatia of Telestra Tradeplace will own the remaining 21 per cent.
The approval of the plan by the Foreign Investment Promotion Board had brought out differences between the departments headed by Finance Minister P Chidambaram and Aviation Minister Ajit Singh. Etihad Airways PJSC is also said to be close to picking up a 24 per cent stake in Jet Airways (India)
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