India: Foreign airlines can control Indian carriers via group firms

While foreign airlines can’t directly own more than 49% in Indian airlines, despite Monday’s liberalised Foreign Direct Investment policy, their group companies or investors can fully own airlines in India with govt approval. So while the likes of AirAsia and SIA will continue to have a cap of 49% on their stakes in Indian arms, The govt is looking to dilute the rule which makes it mandatory for an Indian carrier to be controlled and owned by an Indian or an Indian entity. This will increase competition for Indian airlines, as deep-pocketed airlines from the Gulf will be able to set up shops in India through their group companies. “A foreign airline, through its group companies, will be able to own a carrier in India,” said a senior civil aviation ministry official. <br/>