In what may significantly boost the amount of foreign funds entering the aviation sector, the government has moved a Cabinet note in which the ministry of civil aviation has proposed to permit up to 74% foreign direct investment (FDI) in non-scheduled, chartered and cargo airlines without the requisite foreign investment promotion board (FIPB) approvals.
This automatic route for FDI does not include investment from foreign airlines.
The note further says that FDI of up to 74% may be permitted on the automatic route for ground handling services as long as they have the necessary sectoral and security clearances. ?NRI (Non Resident Indians) investment would be allowed up to 100% on the automatic route,? the note said.
As for maintenance and repair organisations, flying training institutes, technical training institutes and helicopter and seaplane services that require DGCA approval, the note says that FDI of up to 100% may be allowed via the automatic route.
The note has also spelt the death knell for foreign investment from foreign airlines as it explicitly states that no foreign airline can ?directly or indirectly? invest in the aviation sector.