Aviation FDI may take off

NEW DELHI: The Union Cabinet which will meet here on Wednesday will also consider two changes in the airline sector: one, abandoning the present ban on foreign airlines owning, directly or indirectly, an equity stake in a domestic airline; and two, a proposal to hike the foreign equity cap for any investor from the present 40% to 49%.
The foreign investment proposals for airline companies will have to be routed through FIPB for clearance and would be subjected to other regulations for domestic industry. The government will also decide on raising FDI cap in airports and airport facilities to 100%.
The oil sector is set to see a slew of relaxations including automatic clearances for 100% equity participation in PSU oil refining and petroleum goods subject to existing sectoral policy and regulatory framework in marketing and oil exploration. This decision would be significant considering that the government plan to disinvest in oil majors HPCL and BPCL. Also, 100% FDI is to be allowed in small and medium size oil fields.
Natural gas and liquefied natural gas projects may also become eligible for 100% FDI participation. However, the proposal will have to be cleared on a case-to-case basis by the FIPB.
The FDI cap for scientific and technical journals, periodical and magazines would be raised to 100%. At present, only those scientific and technical publications which are printed from special economic zones are eligible for 100% FDI participation.
Other areas which could see relaxation are internet/email/voice mail where the proposal involves allowing 100% FDI. The guidelines for these areas is proposed to be issued later by the concerned departments.
The FDI cap for radio paging is also to be relaxed. The existing cap of 74% for gateways and total end-to-end bandwidth provision will continue, but prospective investors will not be required to seek FIPB clearance.