Faced with huge infrastructure requirements for the fast growing aviation sector, the government will soon announce a major liberalisation in FDI policy, hiking the threshold limit in many of the ground handling and support services to 100 per cent.
“The annual FDI policy review has already started and aviation services is one area where the government wants to go all out to attract investment from overseas,” a senior official said.
Helped by intense competition and burgeoning of low cost carriers, Indian aviation industry is growing at the annual rate of 25-30 per cent.
However, the growth has generated the need for improving aviation services like ground-handling, maintenance and training, according to analysts.
Air charter services
“In these services FDI could go to 74-100 per cent. In many of these areas FDI would be allowed through automatic route,” he said.
At present, all Air Transport Services come under a common head and FDI of up to 49 per cent is allowed. Now, these services will be treated separately. Sources said in air charter services too FDI regime will be liberalised.
The announcement about the changes in FDI policy in aviation and other sectors is expected in a month or so. In greenfield airports 100 per cent FDI is allowed through automatic route, while in existing projects nod of FIPB is required to take the foreign holding beyond 74 per cent. Apart from aviation sector, foreign investors will be allowed to pick up stake in commodity exchanges, while in asset reconstruction companies the FDI cap of 49 per cent will be reviewed. In petroleum sector too, FDI norms will be liberalised.

Global airline alliances woo Indian carriers
global airline alliances, SkyTeam and OneWorld, are bullish about the prospects in the Indian market and have started holding preliminary discussions with Indian carriers to attract them into their respective teams.
“The need and potential of having an Indian airline in the alliance has grown. We have held exploratory discussions with Air India, Jet Airways and Kingfisher about joining the alliance. Sooner than later we will have an Indian airline joining the SkyTeam,” Chairman Leo van Wijk said.
Both Mr van Wijk and his competitor, OneWorld Managing Partner John McCulloch, told PTI separately that India was a huge market and a “major target for us.”
India, China and Brazil were “the next growth markets and the global airline alliances will see more participation from these nations,” Mr van Wijk added.