ibnlive » Business

Sep 14, 2012 at 05:10pm IST

Centre likely to allow FDI in aviation: Sources

New Delhi: Notwithstanding resistance by allies, the Centre is likely to allow investment by foreign airlines in Indian aviation industry which could benefit troubled companies like Kingfisher, Spicejet and Go Air. Gulf-based carriers like Emirates could be the first foreign airlines to enter the Indian aviation sector.

Sources say that the government could also hike FDI limit in broadcasting, insurance and pension sectors. The government might let the states take the final call on on multi-brand retail.

The Cabinet will also consider a proposal for disinvestment in seven PSUs, including National Aluminium Limited Company (NALCO), Steel Authority of India Limited (SAIL) and Mines and Minerals Trading Corporation (MMTC), to the tune of Rs 15,000 crore.

Sources said the Cabinet will take up a proposal for allowing foreign airlines to pick up stakes in Indian carriers, a long-pending demand of the domestic industry to give a boost to the sector.

At present, India allows foreign investors, not related to airline business, to buy up to 49 per cent stake in domestic airlines but foreign carriers are not permitted to invest.

The government had initiated the process in January but key UPA constituent Trinamool Congress was opposed to it.

Cash-strapped Kingfisher Airlines, which is burdened with a debt of over Rs 7,000 crore, has been in the forefront of pushing for permission to allow foreign airlines to invest.

Among other proposals slated for consideration is the one on raising the cap of FDI to 74 per cent in broadcast sector across the board.

The Department of Industrial Policy and Promotion (DIPP) has proposed that FDI limit in the broadcast carriage services providers, including Direct-to-Home, Head-end in the Sky (HITS) and cable TV must be uniform.

HITS is a satellite multiplex service that provides TV channels for cable operations.

At present, 49 per cent FDI is allowed in cable TV and DTH while it is 74 per cent in HITS.

(With additional inputs from PTI)