Indian Government Considers Foreign Investment

India’s aviation industry, reeling from massive losses and negative traffic growth, could receive a boost.  The central government has indicated that it might consider a proposal to allow foreign airlines to acquire up to 49% equity stakes in Indian carriers.  Currently, it permits up to 49% foreign direct investment in domestic carriers, but prohibits foreign airlines from holding any equity directly or indirectly.
The move is being driven by the Department of Industrial Policy and Promotion, which wants to see the law changed to allow foreign investment in the country’s struggling airlines.  Any move to ease investment policy would also be applicable for the National Aviation Company of India, the holding company for Air India.