The Confederation of Indian Industry (CII) has called for allowing foreign airlines to invest up to 49% in domestic carriers.
The ministry of civil aviation would soon be moving a cabinet note proposing the same after a group of ministers (GoM) cleared the proposal in January.
"A liberal foreign direct investment (FDI) regime would pave the way for foreign airlines to participate in India's aviation sector and strengthen it. A comprehensive policy direction is needed to address the prevailing crisis and lay a path for future growth," said Chandrajit Banerjee, director general, CII.
Aviation sector in India is going through a tumultuous phase and the policy should create an enabling framework for safe, secure, efficient, investor friendly and a viable aviation sector in the country, CII said in a statement. A liberal FDI regime would also instill confidence among foreign investors, including overseas hedge funds and private equity groups, in the domestic carriers, it said.
Highlighting the need for building a MRO (maintenance, repair and overhaul) industry in India, the CII said that the MRO space is a $45-billion market globally, of which India constitutes only 1%.
"MRO constitutes a vital element of aviation infrastructure. At present, airlines in India currently outsource major checks and aircraft servicing to MRO hubs like Singapore, Malaysia, South Korea, China, Japan and Dubai," it said.
CII suggested that the new policy should review bilaterals and recommended a regulator for air transport sector.