The Hindu Business Line : Cabinet likely to take up hiking FDI in aviation sector

New Delhi, Jan 16 A slew of proposals of the Ministry of Civil Aviation including enhancing the foreign direct investment (FDI) levels in seaplanes, Maintenance, Repair and Overhaul Facilities and helicopters apart from creating a greenfield airport at Kannur are likely to be considered by the Union Cabinet on Thursday.

In addition the proposal for setting up a cargo hub at Nagpur is also likely to be considered at Thursday’s meeting.

At present the FDI limit in cargo operations is pegged at 49 per cent but as in the case of civil aviation, foreign airlines are not allowed into the sector. The thinking in the Government is to raise this 49 per cent limit to 74 per cent and possibly allow foreign airlines to pick up 49 per cent stake under the overall 74 per cent ceiling. In the case of seaplanes and MRO facilities the Government plans to allow 100 per cent FDI inflows.

“The proposals should be viewed in the overall context of the Government liberalising its FDI policy,” a senior Government official said when asked why changes in FDI policy were being done now.

The existing curb on foreign airlines picking up a direct or indirect stake in a domestic passenger airline was not being considered at the moment, officials said.

Kannur airport

The approval of the Union Cabinet is required before work on construction of the greenfield airport at Kannur can begin. Incidentally, the State Cabinet has already acquired 2,000 acres for the project, which is proposed to be implemented through the public-private participation route. The cost of the project is estimated at Rs 930 crore.

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