Policy Initiatives

Changes in FDI Limits

The Government approved the FDI limits in the civil aviation sector which are expected to bring in more foreign investments to the sector and, thus, to the country. This includes upto 49% on automatic route and upto 100% for NRI in air transport services subject to no direct or indirect participation by foreign airlines; upto 74% on automatic route for non-scheduled airlines, chartered airlines and cargo airlines and up to 100% for NRIs subject to no direct or indirect participation by foreign airlines in non-scheduled and chartered airlines; upto 74% for ground handling services and up to 100% for NRIs on automatic route subject to sectoral regulations and security clearance; and upto 100% on automatic route for maintenance and repair organisations,flying training institutes, technical training institutions and helicopter/seaplane services.

Foreign Equity Participation

At present, the domestic air transport policy debars foreign airlines from equity participation in the companies formed for domestic air transportation. The policy allows participation of foreign individual/companies up to 40 per cent and the participation of Non-Resident Indians (NRIs) / Overseas Corporate Bodies (OCBs) up to 100 per cent in the domestic air transport services. The issue relating to permitting foreign airlines equity investment in companies formed for domestic operations may be reconsidered by the Government. Moreover, overall increase in the foreign equity limit in domestic airlines operations may also be considered with a view to attracting new technology and management expertise.

Foreign Equity

At present, the foreign equity limit in the international services is 26 per cent. In order to attract investment in this sector, the possibility of increase in foreign equity participation may also be considered.

Policy Framework

The Airports Economic Regulatory Authority of India Act, 2008

An Act to provide for the establishment of an Airports Economic Regulatory Authority to regulate tariff and other charges for the aeronautical services rendered at airports and to monitor performance standards of airports and to establish Appellate Tribunal to adjudicate disputes and dispose of appeals and for matters connected therewith.

Full text of the Policy

Civil Aviation Policy

Mission of the policy

To maintain a competitive civil aviation environment, which ensures safety and security in accordance with international standards, promotes efficient, cost-effective and orderly growth of air transport and contributes to social and economic development of the country.

Strategic Objectives of the policy

The objectives of this policy are the creation and continued facilitation of a competitive and service-oriented civil aviation environment in which:

• The interests of the users of civil aviation are the guiding force behind all decisions, systems and arrangements,
• Safe, efficient, reliable and widespread quality air transport services are provided at reasonable prices,
• There exists a well-defined regulatory framework catering to changing needs and circumstances,
• All players and stakeholders are assured of a level playing field,
• Private participation is encouraged and opportunities created for investors to realize adequate returns on their investments,
• Recognizing that aviation today is an important element of infrastructure, rapid upgradation of airport infrastructure to world class with priority to the busiest airports and those handling international flights,
• Recognizing that transportation of air cargo is vital to the economic growth of the country, creation and development of specific infrastructure for air transportation of cargo and express cargo is encouraged,
• "Airline operations and acquisition of aircraft" is conferred "infrastructure" status for overall growth of civil aviation sector in the country,
• Domestic and international aviation in the country are encouraged to grow at par with world aviation industry,
• Inter-linkages with other modes of transport are encouraged and stimulated,
• Trade, tourism and overall economic activity and growth is encouraged,
• International cooperation in aviation and development in tune with international trends and best practices, consistent with airspace sovereignty is promoted,
• Indigenous development of aircraft, components and aviation products is encouraged,
• Security of civil aviation operations is ensured through appropriate systems, policies, and practices, and
• Effective systems are put in place for timely crisis and disaster management, including investigation of incidents/accidents.

Full text of the policy

Policy on Airport Infrastructure

Objectives of Policy

• To provide a boost to international trade and tourism and enhance the country's image in the comity of nations;
• To provide airport capacity ahead of demand, in order to handle an increasing volume of air traffic and to garner the maximum share of traffic in the region;
• To enhance airport facilities to make the airport user friendly and achieve higher level of customer satisfaction;
• To ensure total safety and security of aircraft operations by the introduction of state-of-art air traffic, security and related services;
• To provide multi-modal linkages;
• To provide a market orientation to the present structure, bridge the resource gap and encourage greater efficiency and enterprise in the operation of airports, through the introduction of private capital and management skills;
• To foster the development of a strong airport infrastructure, maintaining a balance between the need for economic viability and the objective of equitable regional dispersal of infrastructural facilities;
• In the achievement of the above objective, to lay special emphasis on the development of infrastructure for remote and inaccessible areas, especially the North East, the hilly and island regions; and
• To encourage transparency and clarity in the decision-making processes of Government and its public sector units.

Full text of the policy

Useful Weblinks

Ministry of Civil Aviation : www.civilaviation.nic.in