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Post Info TOPIC: Govt may up FDI in aviation to 74%


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Govt may up FDI in aviation to 74%
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http://www.business-standard.com/common/storypage.php?leftnm=lmnu2&subLeft=1&autono=265961&tab=r
Govt may up FDI in aviation to 74%
 
Bipin Chandran / New Delhi November 25, 2006 
 
Move aimed at helping carriers bankroll growth plans. 
 
The government is considering a proposal to raise the foreign investment cap in domestic carriers from 49 per cent to 74 per cent. This has been necessitated following the failure of the existing regime to bring in substantial foreign direct investment in the sector. 
 
The government is of the view that a more investment friendly system is required to help carriers raise funds for their expansion plans. Moreover, fund inflow will also help carriers tide over their financial woes. 
 
It is expected that Indian carriers will acquire close to 400 aircraft — valued at over $15 billion — over the next few years as a part of their expansion plans. But, most such plans hinge on their capacity to raise funds. 
 
However, foreign airlines looking to invest in India’s aviation sector still have to wait — the ban on their investing in domestic carriers will continue. Even foreign equity funds in which airline companies have a stake are barred. 
 
On the other hand, the restrictions on the composition of an airline’s board are expected to be relaxed. The present policy restricts the number of foreign members of an airline board to a third of its total size. 
 
It also prevents a foreign national from being the chairman of the board. The restrictions were put in place to ensure that control over airlines stayed in the hands of Indian nationals. 
 
The proposed civil aviation policy is expected to detail such changes. 
 
“We are trying to reach a broad consensus on the issue. Stakeholders will be consulted before a final decision is taken,” said a senior civil aviation ministry official.
 
 


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karatecatman wrote:


  
However, foreign airlines looking to invest in India’s aviation sector still have to wait — the ban on their investing in domestic carriers will continue.  




Wh would be Interested But Airlines


regds


MEL



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I wish they would completely open up foreign skies to Indian carriers as well - raising FDI is all fine and dandy, but let the existing players exploit the demand to the full.

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FDI may fly up to 74% in airline sub-sectors
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http://economictimes.indiatimes.com/articleshow/644640.cms
FDI may fly up to 74% in airline sub-sectors
SUNNY VERMA


TIMES NEWS NETWORK[ THURSDAY, NOVEMBER 30, 2006 02:29:33 AM]
 
NEW DELHI: THE government is planning to raise the foreign direct investment (FDI) limit to 74% for non-scheduled airline operations, helicopter services and regional airlines using small aircraft. The current FDI ceiling for airline services is 49%.


The proposal for hike in FDI limit in these sub-sectors, mooted by civil aviation minister Praful Patel, is to catalyse growth in these key areas, a government official said. However, FDI in domestic airlines will be retained at the existing level of 49%. The move involves ushering in a different FDI ceiling for these sub-sectors while retaining the limit for the chunk of domestic scheduled operators at the current level.


While Indian aviation is growing at an impressive double-digit pace, the benefit is flowing mostly to high-density metro routes which have been the focus for all major airlines. However, non-metro routes, which can be profitably served by smaller airlines and helicopters, has not shown similar growth. Hence the plan to increase FDI limit as a booster dose for these lagging areas which need more connectivity.


“Allowing greater FDI in smaller airlines and helicopter firms will boost traffic in under-served areas and enhance overall growth of the aviation sector,” a senior civil aviation ministry official told ET. Industry experts said the increase in FDI cap may spur growth in the feeder airline business, a segment which has not kicked off in India so far.


“Hike in FDI in non-scheduled operations and helicopter services will give a fillip to the aviation industry,” said Kapil Kaul, CEO of Centre for Asia Pacific Aviation (CAPA) for Indian sub-continent and the Middle East. Civil aviation minister Praful Patel had said recently that there was a need to open up areas like non-scheduled operations (charter flights), cargo and helicopters services. Both domestic and foreign private investment is crucial for development of aviation sector which is estimated to require Rs 40,000-crore in the medium term to sustain high growth. FDI, both at airports and in airlines, is considered important for government to achieve its long-term plan of creating an aviation grid across the country by developing 400 airports and airstrips.


Already, 100% FDI is allowed in airports through automatic route. Several foreign funds have recently expressed interest in taking an exposure to the growing Indian aviation market. The proposed hike in FDI in non-scheduled operations, helicopter services and regional airlines may enable them to hold majority stake in these areas. The proposed will, however, come with a rider. Though FDI in Indian carriers is allowed, no foreign airline firms can have a direct or indirect a stake in domestic Indian carriers. Even foreign equity funds, in which airline firms have a stake, are barred from investing in Indian carriers.
 
 



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NRIs can invest 100% in realty
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http://www.myiris.com/newsCentre/newsPopup.php?fileR=20061130171531088&dir=2006/11/30&secID=livenews
NRIs can invest 100% in realty
Source: IRIS (30 November 2006)


In a bid to attract further investments by Non-Resident Indians (NRIs),Government of India has put in place a liberal and transparent investment policy structure for them.


As per the new guidelines, NRIs can now invest up to 100% via automatic route in housing and real estate sector involving construction of residential and commercial premises. They can also put in money in the development of townships and city and regional level urban infrastructure facilities such as roads and bridges.


Investment in participatory ventures in the aforesaid activities and investment in housing finance institutions too come within their ambit.


Further, NRIs can also invest up to 100% in Indian companies engaged in Air Taxi operation. For foreign companies, foreign direct investment (FDI) is permitted only up to 49% in this area. Other than investments under the FDI policy, NRI can also invest in various schemes of mutual funds and PSU Bonds, under the Foreign Exchange Management Act (FEMA) norms.


Interestingly, NRIs are permitted to invest up to 100% equity in partnership firms/ proprietary concerns, when foreign companies are restricted invest through such route. Agricultural/plantation activity or real estate business however are exceptions to this provision.


Under the portfolio schemes, NRIs are permitted to invest in shares and debentures through secondary market purchase from the stock exchanges. The investment limit for the shares and debentures stand at  5% and 10% respectively which is over and above the foreign institutional investors (FII) portfolio investments limits. This will ensure that NRI investment are not displaced by FIIs.


In addition to these, NRIs can acquire immovable property, other than agricultural land/ plantation property / farm house and transfer such property to a resident, another than NRI.



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RE: Govt may up FDI in aviation to 74%
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http://www.financialexpress.com/fe_full_story.php?content_id=148952
CHC arrives with first FDI in chopper service 
 
BIPIN CHANDRAN
Posted online: Friday, December 15, 2006 at 0153 hours IST 
  
NEW DELHI, DEC 14:  In the first foreign investment in a non-scheduled air service in India, the world’s largest helicopter service company, Canada-based CHC Helicopter Corporation, will acquire a 49% stake in an Indian venture, CHC Helicopters Services India.
Under current regulations a maximum of 49% FDI is allowed in non-scheduled airlines, though the government is considering an increase to 74%. CHC will acquire shares from the Indian promoters of CHC India—Gautam Philip and Vivek Berry. CHC India now has an authorised share capital of Rs 5,00,000, comprising 50,000 shares of Rs 10 each ..........
 


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