CCEA to take up FDI issue in civil aviation on Friday

The government is expected to take a decision tomorrow on the issue of allowing foreign airlines to buy up to 49 per cent stake in cash-starved Indian carriers.

"It is listed (in the agenda)," Commerce and Industry Minister Anand Sharma told reporters in New Delhi.

Cabinet Committee on Economic Affairs (CCEA) is likely to take up the matter on Friday. According to sources, while the ministries of finance and civil aviation have already approved the proposal to amend the FDI guidelines for the aviation sector, some other ministries are yet to give their nod.

The Department of Industrial Policy and Promotion (DIPP) had moved a cabinet note in this regard. At present, India allows foreign investors, not related to airline business, to buy up to 49

per cent stake in domestic airlines, but foreign carriers are not permitted to invest in them.

Following demands from the cash-strapped aviation industry, the government had in January launched the process.

Allowing foreign airlines to buy stake in domestic carriers is expected to benefit Kingfisher Airlines, which is burdened by a debt of over Rs 7,000 crore (Rs 70 billion).

While Kingfisher has been strongly pitching for permission to allow foreign airlines to invest in domestic carriers, other major carriers like Jet Airways and the only profit-making airline, IndiGo are opposed to it.

There has been a mixed response to the issue so far, with even the Planning Commission, in its document on the aviation sector for the 12th Plan, acknowledging that there was no consensus on it.