FICCI has pitched for 100% FDI in the aviation sector

A joint report of FICCI and KPMG has suggested that India should go for 100% FDI in aviation sector in order to realise the full potential of the aviation industry. The report was launched at the ongoing India Aviation show 2016. The report has pitched for an open sky policy and has urged the government to finalise the National Civil Aviation Policy as soon as possible in order to resolve the issue of international flying norms for local carriers. Currently the government allows up to 49 percent investment by a foreign airline in an Indian carrier. However the draft policy that was unveiled last year in October, proposes to hike this figure to over 50%.

The report also claimed that India needs to be promoted as a hub of trade and tourism in order to derive benefits for the aviation industry. Some of the leading aviation hubs like US, EU, Singapore, China and UAE have a robust tourism, maritime, industrial, trading ecosystem that supports as well as benefits from their aviation sector. The report also called for a close collaboration between the Ministry of Civil Aviation and the other related ministries.

India’s domestic aviation market grew at over 20% from January to December 2015. With around 81 million trips the country has recorded the highest growth rate in the world. Indian Civil Aviation industry currently ranks ninth in the global civil aviation market. This growth can be attributed to the modern technology, airports, competition among the airlines, greater regional connectivity and FDI. The report also said that the new aviation policy will prove to be beneficial for the growth of the aviation sector. Various fiscal & monetary incentives, liberal policies are focused on the ease of doing business and providing a greater regional & global connectivity.

fdi in aviation

According to the report, steps are being taken to operationalise 160 airports in India. This will improve the air connectivity to remote areas by a huge extent. Also various Public-Private Partnerships in this sector will get support from the state in terms of tax holidays, concessional land, financing & other incentives.

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