BY OUR AVIATION CORRESPONDENT
25 August, 2005: As the nation witnesses an aviation boom, the Union Government is toying with the idea of giving the rights for people of Indian origin to invest up to 100 per cent in the domestic aviation sector.
Minister for Commerce and Industry Kamal Nath told Rajya Sabha, the Upper House of Parliament, that the government would soon make its stand on the issue clear.
As per the country’s norms which govern foreign direct investment, people of Indian origin are treated on par with Non Resident Indians, the Minister said.
Non Resident Indians have the rights to invest 100 per cent in domestic airlines.
But the issue is whether this overrides the Aircraft Rules 1937, which stipulate that permission for scheduled or non-scheduled aircraft operators can be provided to only Indian citizens. In case of corporate bodies, the permission can be granted only if the firm has an ownership pattern in which the control is with Indian nationals.
The minister said that as per this, since PIOs are not considered Indian citizens they cannot be allowed to operate air traffic services at present. But the Civil Aviation ministry is in the process of “rectifying” the aircraft rules. This is a clear indication that provisions which bars PIOs from operating air traffic services would be done away with.
The issue gained significance in the wake of the denial of clearance to low cost airline Magic Air. Magic Air’s majority stake is held by Nira Wadia, who is a Birtish national but a
PIO.
Indian aviation laws have capped foreign direct investment in civil aviation at 49 per cent and banned foreign airlines from investing in domestic carriers.
As pressure mount on the Indian government to lift curbs in the aviation sector, analysts are of the view that the government will lift the curbs to enable a level playing field in the sector in the new aviation policy to be announced soon.
BY OUR AVIATION CORRESPONDENT
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