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The sudden buzz about 74 per cent Foreign Direct Investment being allowed in air cargo operations, has sent some colleagues covering the civil aviation sector to sniff around for the likely reasons. While it is apparent that air cargo operations would be quite profitable with India’s foreign trade rising leaps and bounds, the Civil Aviation Ministry’s re-look at the FDI limits in this sector is said to be based on some sharp thinking.

The Government is quite keen to send out the signal that it has not given up on its liberalisation drive in the aviation sector, but is constrained by the lack of support from the Left parties to raise the 49 per cent FDI cap in the civil aviation sector. Apparently, there are no such inhibitions vis-À-vis air cargo operations.

So if 74 per cent FDI in this sector goes through, the Government may be able to redeem a part of its pro-liberalisation reputation. Most other pro-liberalisation initiatives, such as raising the FDI cap in insurance, seem firmly stuck for the moment.

Our Bureau

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