New Delhi, Oct. 17: Two high-profile foreign investment proposals involving the Singapore government will come up before the Foreign Investment Promotion Board next week.
On the agenda are Singapore Airline’s $49-million FDI for its proposed joint venture with the Tatas and SingTel’s proposal to buy out its minority stakeholders in its Indian telecom arm.
Top officials said the FIPB was likely to clear the two deals “as we need the money that will flow in as well as because of the strategic relationship that India has been building with Singapore as part of its Look East policy”.
Both the investments involve Temasek Holdings, the investment arm of the Singapore government, which is a majority owner in both SingTel and Singapore Airlines.
New Delhi has been reaching out to Southeast Asian countries under the Look East policy, which is meant to counter China’s influence in the region.
In fact, the FIPB meet was scheduled tomorrow but had to be postponed to October 24 as many departments sought time to prepare their responses.
SingTel plans to increase its stake in SingTel Global (India) Private Ltd to 100 per cent from 74 per cent by buying out the minority stakes of Bharti Airtel and Leela India. Bharti has around 10 per cent stake, while Leela India owns 16 per cent.
The move will help Bharti sell its non-core business even as it expands through a series of acquisitions.
Officials said SingTel was seeking an in-principle approval, the first in telecom after the government raised the FDI limit in the sector in August to 100 per cent from 74 per cent. Details such as the buyout price are not yet available.
Singapore Airlines will hold 49 per cent in the joint venture airline with the Tatas, who will hold 51 per cent. Once the FIPB gives its clearance, the airline is expected to take off within six months.
According to the proposal before the Foreign Investment Promotion Board, substantial ownership and effective control of the airline will be with Tata Sons; Singapore Airlines will have a minority representation on the board.
The joint venture is, however, seen by analysts as one of the strongest alliances in the domestic aviation market which could leverage Singapore Airlines’s global network to turn into a major airline in a short time.
A number of other foreign investment proposals were on the agenda on tomorrow’s FIPB meet such as those of Castleton Investment Ltd, Mauritius, GlaxoSmithKline Pte Ltd, Dastag UK, Perrigo API India Pvt Ltd and Intas Pharmaceuticals.
Foreign direct investment grew 20 per cent to $7.05 billion in the April-July period from $5.9 billion a year earlier, according to the department of industrial policy and promotion.