Press Information Bureau
Government of India
Ministry of Commerce & Industry

03-September-2012 15:31 IST

FDI in Airlines

 

As per extant FDI policy, as contained in paragraph 6.2.9 of ‘Circular 1 of 2012  - Consolidated FDI Policy’, FDI is permitted in Air Transport Services, including Domestic Scheduled Passenger Airlines, Non-Scheduled Air Transport Services, helicopter and seaplane services, subject to the following conditions:

No foreign airlines would be allowed to participate directly or indirectly in the equity of an Air Transport Undertaking engaged in operating Scheduled and Non-Scheduled Air Transport Services except Cargo airlines.

Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services.

The level of FDI permitted in the aforesaid activities under Air Transport Services is as follows:

Sector/Activity	% of FDI Cap/ Equity	Entry Route
(1) Scheduled Air Transport Services/ Domestic Scheduled Passenger Airlines	49% FDI (100% for NRIs)	Automatic
(2) Non-Scheduled Air Transport Services	74% FDI (100% for NRIs)	Automatic up to 49% Government route beyond 49% and up to 74%
(3) Helicopter services/ seaplane services requiring DGCA approval	100%	Automatic

The Foreign Investment Promotion Board (FIPB) has issued approval dated 2.12.2008 to M/s Spicejet Ltd., New Delhi, to receive foreign investment from M/s GS Investment Partners (Mauritius) I Limited and/ or GS Investment Partners (Mauritius) II Limited, both owned by M/s Goldman Sachs Investment Partners Masters Fund, L.P.

This information was given by Minister of State for Commerce and Industry, Shri Jyotiraditya M. Scindia in a written reply to a question raised in the Lok  Sabha  today.

DS/GK

Foreign investment caps in airlines limit equity by foreign carriers while permitting investment under automatic or government routes. FDI in Air Transport Services restricts foreign airlines from holding equity in Scheduled and Non Scheduled passenger air operators except for Cargo airlines; activity specific foreign equity ceilings apply with differing entry routes-automatic for permitted thresholds and the government route for investment beyond automatic limits-while helicopter and seaplane services approved by the regulator are open to full foreign investment.