Even as concerns
remained over whether AirAsia’s India plans has run into rough weather, Union
Minister of Commerce, Industry and Textiles Anand Sharma clarified that the
Foreign Investment Promotion Board (FIPB) had given its approval after “careful
scrutiny”.
“You have to
clearly read the press note. It is FDI in civil aviation in an existing airline
or in the capital of a company. See, you have to look at the fine print. I am
sure this decision has been made after very careful scrutiny of the policy and
its understanding by the FIPB,” Sharma said on the sidelines of the ICC Asia
Pacific CEO Forum on Thursday.
The FIPB granted
an “in-principle” approval to the Malaysian budget carrier’s plans to start a
new airline in India in partnership with Tata Sons and Arun Bhatia’s Telestra
Tradeplace Pvt Ltd on Wednesday. This would be the first foreign investment
proposal to be cleared by the finance ministry after the easing of Foreign
Direct Investment (FDI) policy in aviation.
The Department of
Industrial Policy and Promotion (DIPP) has been approached by the aviation
ministry for a clarification over whether the amended FDI norms in aviation are
applicable to new airline companies or only to existing ones. FIPB officials
said that the three companies would now have to approach DGCA for the relevant
licences and a scheduled air operator’s permit.
AirAsia had
announced its plans to enter Indian skies last month and said that it intends
to control 49 per cent in the new airline with Tata group company, Tata Sons
and Telestra Tradeplace occupying 30 per cent and 21 per cent respectively. The
initial investment in the JV would be around `80 crore. A finance ministry
official said that the clearance had been given on the grounds that 49% FDI is
now allowed by a foreign airline.
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