NEW DELHI, India – After 16 years, the government is set to again allow foreign airlines to take stakes in Indian carriers later this week. The move is expected to help ailing Indian operators like Kingfisher raise funds. More importantly, it could pave the way for joint ventures – like Tata-Singapore Airlines that was ironically nixed years ago by disallowing FDI by foreign airlines – for start-ups too.
The commerce & industry ministry on Tuesday circulated a Cabinet note seeking comments from other ministries to permit 49% FDI, and is hoping that the proposal will go through in its present form as the finance and civil aviation ministries had agreed to it earlier.
But there is a great urgency in the government with the industry ministry rushing through the second round of consultations. It is planning to send the final note to the cabinet secretariat by Wednesday, a senior government official said.