Commerce minister Anand Sharma with Hero Group MD Pawan Munjal during a conference in New Delhi on Thursday. Picture by Ramakant Kushwaha
New Delhi, April 5: The government today said a decision on allowing foreign carriers to invest in Indian airlines was likely to be taken within the next month.
Though the Indian aviation industry is growing at a decent pace of 15-20 per cent, five of the country’s six major carriers are in the red.
“This has been discussed with the finance minister, civil aviation minister and myself and an appropriate view and decision will be taken very soon,” commerce and industry minister Anand Sharma said today.
Civil aviation minister Ajit Singh and finance minister Pranab Mukherjee had met in January and initiated the process of relaxing aviation FDI rule.
Thereafter, the civil aviation ministry had circulated a cabinet note.
At present, foreign carriers are barred from buying into Indian airlines, but foreign investors are allowed to invest up to a cumulative 49 per cent.
Meanwhile, Mukherjee had in the budget for 2012-13 allowed aviation firms to raise up to $1 billion in external commercial borrowings to survive the financial crisis.]
The government has also permitted direct import of aviation turbine fuel, which will enable airlines to save at least 10 per cent in operating costs.
The domestic civil aviation sector grew 18.5 per cent in the last seven years, and the Centre has taken various steps to address the woes faced by the airline industry, the Economic Survey for 2011-12 had said.
Kingfisher Airlines chairman Vijay Mallya said two non-airline players and a foreign carrier were interested in investing in Kingfisher.
The management of Air India, too, had stated last week that the company was awaiting “fresh infusion” of funds in this fiscal. It has a debt of more than Rs 40,000 crore.
Sharma today expressed confidence that a consensus would soon emerge on opening multi-brand retail to foreign investors so that states, which were keen, could opt for it.
Following widespread opposition, including from several state governments and its own allies, the government had suspended its decision to allow 51 per cent foreign direct investment in multi-brand retail on November 24, 2011.