Inter-ministerial differences would be sorted out for paving the way for Tatas to set up airline company in collaboration with Malaysian budget carrier AirAsia, said Planning Commission Deputy Chairman Montek Singh Ahluwalia. If Tatas and an international airline want to set up an Indian airlines as long as the international fellows hold up to 49 per cent, they should be allowed to do so, Ahluwalia said in Delhi.
The Foreign Investment Promotion Board (FIPB) on March 6 cleared the Malaysian budget carrier AirAsia's bid to launch an airline in India by joining hands with Tata Sons. But, the Civil Aviation Ministry sought further clarity on FDI policy in aviation, particularly on whether a foreign airline could invest in a new venture after the approval.
AirAsia has announced it would set up a 49:30:21 JV with the Tata Sons and Telstra Tradeplace of Indian investor Arun Bhatia to launch a new airline. The initial investment by the AirAsia-led JV would be Rs 80 crore. The Finance Ministry and Department of Industrial Policy and Promotion officials have said the FIPB clearance was granted in accordance with the policy which allows up to 49 per cent FDI by a foreign carrier in an Indian airline company.