The Left parties have agreed to the proposal for raising the foreign direct investment limit in domestic private carriers from 40 per cent to 49 per cent.
During their lunch and dinner meetings with Finance Minister P Chidambaram on Wednesday, Left leaders were also assured that FDI will not be allowed in the two state-owned carriers, Air-India and Indian Airlines.
The finance minister reasoned with CPI and CPM leaders that foreign investment was required for private domestic carriers to purchase or lease new aircraft to start their operations in the Gulf and Asean sectors.
In Kolkata, Civil Aviation Minister Praful Patel today confirmed that the Left parties had agreed that foreign equity participation up to 49 per cent could be allowed.
It is worth noting that since the government allowed 40 per cent FDI in domestic carriers, not even a single investment has come in as a result of the stringent guidelines, which prevents the foreign partner from acquiring management control.
The finance ministry is at loggerheads with the civil aviation ministry over allowing foreign airlines to invest in domestic carriers.
A section of the Left is of the view that the controlling stake in the venture should be in Indian hands even if foreign capital is invited.
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