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(Mar 02, 2008) India allows 100% foreign direct investment (FDI) through the automatic approval route for helicopter and seaplane operations and for maintenance, repair, and overhaul (MRO) facilities. This is a reversal of the previous policy, under which approval of the Foreign Investment Board was required for FDI beyond 74%. Similarly, for ground handling services, FDI of up to 74% is being allowed through the automatic route in scheduled and non-scheduled airline charter operations and in cargo airlines. The decision to allow 100% FDI in MRO facilities followed a decision by the major aircraft manufacturers, including Boeing and Airbus Industries, to establish such facilities in India.

Several other Indian and global engineering players have also evinced keen interest in this emerging field, with the goal of making India an aviation engineering hub. India's Minister of Civil Aviation has been vocal in supporting the growth of such aviation activities. According to him, the decision described above will go a long way to expand regional connectivity and help in speedy transportation of perishable items within and outside the country. Besides establishing flight training and technical training institutes, the new standard will help the aviation industry overcome the massive shortage of pilots and engineers in the face of a burgeoning civil aviation sector in India. (FDI Cap in Air Cargo Raised to 74 Percent, INDIA BRAND EQUITY FOUNDATION NEWS, Jan. 31, 2008, available at http://www.ibef.org/artdisplay.aspx?cat_id=499&art_id=17818.)

Author: Krishan Nehra More by this author
Topic: Foreign investment More on this topic
Jurisdiction: India More about this jurisdiction

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Last updated: 03/02/2008