New Delhi: Faced with huge infrastructure requirements for the fast growing aviation sector, the government will soon announce a major liberalisation in FDI policy, hiking the threshold limit in many of the ground handling and support services to 100%.
“The annual FDI policy review has already started and aviation services is one area where the government wants to go all out to attract investment from overseas,” a senior official said.
Helped by intense competition and burgeoning of low cost carriers, the Indian aviation industry is growing at the annual rate of 25% to 30%.
However, the growth has generated the need for improving aviation services like ground-handling, maintenance and training, according to analysts.
“In these services FDI could go from 74% to 100%. In many of these areas FDI would be allowed through automatic route,” he said.
At present, all Air Transport Services come under a common head and FDI of up to 49 % is allowed. Now, these services will be treated separately.
Sources said in air charter services too FDI regime will be liberalised.
The announcement about the changes in FDI policy in aviation and other sectors is expected in a month or so.
In greenfield airports 100% FDI is allowed through automatic route, while in existing projects nod of FIPB is required to take the foreign holding beyond 74%.
Apart from aviation sector, foreign investors will be allowed to pick up stake in commodity exchanges, while in asset reconstruction companies the FDI cap of 49% will be reviewed. In petroleum sector too, FDI norms will be liberalised.