Hard landing

New Delhi, Feb. 4: Objections from the home and defence ministries are believed to have stalled the much-touted open sky policy which civil aviation minister Rajiv Pratap Rudy had brought before cabinet today.

Rudy had sought clearance for a new civil aviation policy which would have liberalised bilaterals with other nations. This move also includes further relaxation of restrictions on private domestic carriers in flying on international routes.

Private carriers have already been allowed to fly to other Saarc countries, except Pakistan. However, they have been lobbying the government to allow flights to other regions too.

Both the private airlines Jet and Sahara are keen to fly on the lucrative south-east Asian routes where demand is extremely high.

Besides various procedural and security objections, cabinet ministers were believed to be against a decision being taken with such wide-ranging implications just ahead of the general elections.

There was also a feeling — though not expressly voiced — that private airlines should not be allowed to take away routes which had earlier been awarded to the state-run airlines even as the government kept deferring plans to let them buy more aircraft to expand services.

Through last week a marketing war between rival aircraft manufacturers and the nations they represent has stalled Indian Airlines' Rs 10,000 crore mega aircraft purchase plan.

Look-east policy

As part of India’s look-east strategy, the Union cabinet today approved the signing of the framework agreement on BIMST-EC (Bangladesh, India Myanmar Sri Lanka, Thailand economic co-operation) free trade area.

The official spokesman told journalists after the cabinet meeting that the “agreement is expected to promote trade and economic co-operation among the member countries and give India greater access to the markets of these countries.”

The member countries have also agreed to negotiate expeditiously to establish a BIMST-EC free trade area to strengthen and enhance economic co-operation.

He said the agreement would also progressively liberalise and promote trade in goods and services, create a transparent, liberal and facilitative investment.

The objective of the agreement is to strengthen and enhance economic trade and investment co-operation among the member nations. It also aims to facilitate a more effective economic integration of the least developed countries in the region and bridge the development gap among them.

The agreement will explore new areas and develop suitable measures for closer cooperation.

The cabinet also gave its post facto approval for bilateral investment promotion and protection agreement with the republic of Armenia.