Stocks of aviation companies like Jet Airways, SpiceJet and InterGlobe Aviation Ltd surged upto 7 per cent on Monday after the government allowed 100 per cent FDI in aviation sector under automatic route in Greenfield Projects and 74 per cent FDI in Brownfield Projects under automatic route.
Stocks of Jet Airways, SpiceJet and InterGlobe Aviation Ltd closed 6.56 per cent, 7.36 per cent and 6.02 per cent up at Rs 586.10, Rs 69.30 and Rs 1071.15, respectively. Sensex settled 241.01 points up at 26,866.92.
As per the present FDI policy, foreign investment up to 49 per cent is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service. It has now been decided to raise this limit to 100 per cent, with FDI up to 49 per cent permitted under automatic route and FDI beyond 49 per cent through Government approval.
Only non-airline players will be allowed to bring in 100 per cent FDI in local carriers. Under the new set-up, 49 per cent will be through the automatic route and for anything beyond, government nod will be required. At present, up to 49 per cent FDI is permitted in scheduled airlines.
It has also been decided to permit 100% FDI under automatic route in Brownfield Airport projects to aid in modernisation of the existing airports to establish a high standard and help ease the pressure on the existing airports, it
Prime Minister Narendra Modi hailed a sweeping liberalisation of rules on foreign direct investment on Monday and said the move would make Asia’s third-largest economy the most open in the world. Modi tweeted, ” the changes would provide a “major impetus to employment and job creation in India.”