CRITICAL REVIEW OF 100% FDI IN DOMESTIC SECTOR AIRLINES IN INDIA

In June, 2016, the Indian government had allowed Indian carriers to be fully owned by foreign entities . While foreign carriers will still be required to have up to 49% stake in airlines here, they can now get a foreign partner — like a sovereign wealth fund or an institutional investor — and not look for an Indian partner to put in the remaining 51%. Qatar Airways has, therefore, planned first fully foreign - owned airline in the Domestic Sector of India. According to the proposed provisions, if an Indian airline has more than 49% foreign ownership, then there may be an issue in getting the bilateral rights for flying abroad. But there will be no bar on flying within India. But, the Federation of Indian Airlines (FIA), comprising Jet Airways, IndiGo , SpiceJet and GoAir , is planning to opp ose Qatar Airways' (QA's) Indian plan on the ground that it will be a complete sellout of Indian interests as it hurts desi airlines. It is a complete reversal of 'Make in India'," said an FIA memb er. FIA had used the same argument to oppose Singapore Airlines and AirAsia's JV airlines with the Tata Group in India saying that FDI in airlines was allowed to ensure that existing Indian carriers get much - required funds and expertise and not for JV sta rtups. The government, however, dismisses this view saying that we have to distinguish between investment and operation. The investment and carrier may be 100% foreign, but the airline will be 100% Indian in terms of giving jobs, operations and expenditur e. It will benefit Indian economy tremendously