The Foreign Investment Promotion Board has given the go-ahead to the Tata Group’s proposal for setting up a full service venture with Singapore Airlines.
Tata-SIA Airlines — the joint venture formed by the Tata Group and Singapore Airlines — will now approach the Civil Aviation Ministry for the necessary clearances.
While the Tata Group holds a controlling 51 per cent stake in the company, the remaining 49 per cent is held by Singapore Airlines
The new airline will be launched with an initial investment of $100 million that would include a Foreign Direct Investment component of $49 million. “It (Tata—SIA proposal) has been cleared,” Economic Affairs Secretary Arvind Mayaram told reporters after a meeting of the FIPB on Thursday. Mayaram, who heads the FIPB that vets FDI proposals across sectors where approval is not automatic, said no riders have been set for the joint venture.
The venture secured the approval of the Corporate Affairs Ministry last week.
This is the second approval given to the Tata Group this year.
The FIPB cleared the group’s proposal for a low-cost carrier in partnership with Malaysia’s AirAsia in April. It is expected to start operations by the end of the year.
A Tata Sons spokesperson, when contacted by Business Line , said the company was yet to formally hear from the FIPB. “We are delighted with reports of the approval,” the spokesperson said.
SIA-TATA will now have to approach the Ministry of Civil Aviation for a No Objection Certificate. Following this, it will have to go to the Directorate-General of Civil Aviation before the airline is allowed to take flight.
FIPB also cleared the application of SingTel Global (India), an arm of Singapore-based telecom firm SingTel, which had proposed to increase its stake in its Indian venture.
With the Government removing the 74 per cent cap on FDI in the telecom sector, SingTel (India) sought to increase its stake to 100 percent in its long-distance phone business in India. It proposes to take over stake held by its local minority partners.
SingTel has applied to invest Rs 2.98 crore under the proposal.