Concurring with the views of the Finance and Commerce and Industries Ministries, Montek Singh Ahluwalia, Planning Commission, Deputy Chairman, feels that the Tatas and AirAsia can start an airline venture under the existing Foreign Direct Investment (FDI) regulations.
“In my view, if Tatas want to set up a company to run an airline within the 49 per cent limit, the intention of policy as far as I know, is quite clear that they should be allowed to do it,” Montek told reporters on the sideline of an event here.
AirAsia will hold a 49 per cent equity in the new project with Tata Sons holding 30 per cent with the remaining 21 per cent with another Indian investor, Telestra Tradeplace led by Arun Bhatia.
The Foreign Investment Promotion Board (FIPB) gave its approval for the three-way joint venture proposal. While the Finance and the Commerce and Industries Ministries felt that the norms support the proposed new venture, the Civil Aviation Ministry had expressed doubts over whether foreign airlines should be allowed to invest in new ventures also.
Talking about inter ministerial differences on this issue, Montek said, “I don’t know what the detailed differences are. I am sure they will be sorted out. If Tatas and an international airline want to set up an Indian airline as long as the international partners (hold up to) 49 per cent, they should be allowed to do so.”
Soon after the FIPB nod to the proposal, the Civil Aviation Ministry sought further clarity on the FDI policy in aviation.