ANNOUNCED AS TEMPORARYNo
FDI: Financial incentive
On 14 September 2012, the Indian Cabinet Committee on Economic Affairs approved a new regulation, which allows foreign airlines to invest in scheduled and non-scheduled air transport services. Previously, foreign airlines were only allowed to invest in cargo airlines as well as helicopter and seaplane service companies.
The new regulation includes the following restrictions:
- the foreign investment does not exceed 49 per cent of the total value of the project;
- the foreign company has to be registered and must principally operate in India;
- its chairman and at least two-thirds of the directors must be Indian citizens.
As of March 2013, the Foreign Investment Promotion Board (FIPB) of India reports that AirAsia is the only company having set up a JV company in India, whereas Farnair Switzerland is the only one having purchased shares of an Indian company.
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