can now pick up 49 per cent stake in India's domestic carriers, a step that is expected to give a boost to cash-strapped aviation industry.
The Cabinet Committee on Economic Affairs on Friday approved the proposal which would pave way for much-needed equity infusion into India's airlines passing through acute turbulence as most of them are in dire need of funds for operations.
"The Cabinet today approved the proposal of allowing foreign airlines to pick up to 49 per cent stakes in Indian carrier
. Though FDI of up to 49 per cent, 75 per cent and 100 per cent was there in aviation sector, foreign airlines were not allowed," Civil Aviation Minister Ajit Singh told reporters after the meeting.
Current FDI norms allow foreign investors, not related to airline business, to directly or indirectly own an equity stake of up to 49 per cent in Indian carrier.
Allowing foreign airlines to pick up stakes in Indian carriers has been a long-pending demand of the aviation sector.
Most of the Indian carriers are suffering losses because of high taxes on jet fuel, rising airport fees, costlier loans, poor infrastructure and cut-throat competition.
Except IndiGo, all airlines have posted losses in the financial year ending on March 31. .