A new tune heard in India: Times They Are a-Changin’

By Sawant Singh and Davis Kanjamala, Phoenix Legal

Flying in the face of prevailing negative sentiments about government inaction and policy paralysis, the central Ministry of Commerce and Industry recently came out with a flurry of notifications liberalizing the foreign direct investment (FDI) regime.

Sawant Singh Partner Phoenix Legal
Sawant Singh
Phoenix Legal

Aviation – the beginning of a beautiful friendship? The aviation sector, lately experiencing much turbulence due to rising costs and liquidity issues, has been given a boost by permitting foreign airlines to invest up to 49% of the capital of Indian companies operating scheduled and non-scheduled air transport services, under the approval route. While FDI in aviation was conditionally permitted, participation by foreign airlines was prohibited – hindering entry into the lucrative Indian market.

Foreign investors would have to be mindful of several riders, including obtaining security clearance for foreign personnel. While FDI may not be the panacea for Indian commercial carriers, it might prove to be a game changer in the long run.

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Sawant Singh is a partner and Davis Kanjamala is an associate at the Mumbai office of Phoenix Legal.


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