Civil aviation: FDI norms may be relaxed
The government is planning to relax the foreign direct investment (FDI) norms for the civil aviation sector, reports Gaurav Choudhury.business Updated: Apr 24, 2007 03:13 IST
The government is planning to relax the foreign direct investment (FDI) norms for the civil aviation sector. There are indications that it may enhance the 49 per cent FDI limit in areas such sea-planes, helicopter services and non-scheduled operations.
Besides, the government is also examining a bilateral-aviation safety agreement with the United States. India and the US,
which have an open skies agreement, also initialled a memorandum of understanding to establish the US-India Aviation Cooperation Programme (ACP) for providing unified communication between the governments and private sector entities. The programme would focus on supporting activities relating to air traffic, air space management, expanding airport facilities, installing airport security and monitoring systems and enforcing airworthiness certification and regulatory systems.
The “open skies” agreement with the US had paved the way for a reduction in fares and increased flights between the countries. The pact allows Indian airline companies unrestricted access to key American destinations like New York and Los Angeles, besides enabling onward connectivity to countries like Canada. Reciprocal facilities have been granted by India to the American airlines.
The pact, billed as one of the most liberal aviation agreement signed by India with no restriction on number of destinations or types of aircraft to be flown by airlines, has led to increased aviation co-operation between the US and India. The weekly seat capacity offered on flights between India and the US have increased from 3,948 seats in November 2003, to 6,412 in November 2005 and to nearly 12,000 at present.
Four airlines from the US — Continental, Delta, American Airlines and Northwest — are operating flights to several Indian cities, while Air-India operates daily flights to key American cities. Private Indian carriers like Jet Airways is also planning to start operations to the US in the coming months.
Speaking at the India-US Partnership Summit here Aviation Minister Praful Patel said his ministry has proposed that the prevailing 49 per cent cap on FDI be reviewed in areas like non-scheduled operations, sea planes and helicopters, where higher level of foreign partnership was required.
US Federal Aviation Authority (FAA) chief Marion C Blakey said there was great potential for a bilateral aviation safety agreement (BASA) between the two nations.