Cabinet may hike FDI limit in aviation

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A policy decision to raise the cap on FDI in setting up cargo carriers, operation of sea-planes and establishing a maintenance, repair and overhaul facility for aircraft and engines is likely to be taken by the Union Cabinet.

The Cabinet is also expected to approve a development project for the international airport and a national cargo hub at Nagpur and a modernisation project for the Kannur airport at the meeting, informed sources said.

The Civil Aviation Ministry is understood to have

proposed allowing of 100 per cent FDI in sea-planes and helicopter operations, as also in MRO facilities.

As per the proposal, the prevailing limit of 49 per cent FDI in cargo airlines is likely to be raised to 74 per cent, with foreign airlines being allowed to pick stake in these subject to a maximum of 49 per cent, under the overall 74 per cent cap.

If approved, it would be the first time that foreign carriers would be able to invest in domestic cargo carriers.

Foreign airlines, at present, are also not allowed to pick a stake in Indian passenger carriers.

Civil Aviation Minister Praful Patel has been vocal in his support to the launch of sea-plane operations in the country, which has a vast coastal belt. He has also been supporting expansion of helicopter operations, not just to far-flung and hilly areas but also for purposes like medical emergencies.