Aviation Current Affairs - 2019

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Union Government approves 100% FDI in Aviation, Defence and e-commerce sectors

The Union Government has eased foreign direct investment (FDI) norms for nine sectors to give impetus to job creation and ease of doing business in the country.

Decision in this regard was taken at a high-level meeting chaired by Prime Minister Narendra Modi. With these changes, India becomes most open economy in the world for FDI.

Some of these sectors are

  • Food products: In this sector, 100% FDI under government approval route has been approved.
  • It will include trading in food products including through e-commerce, in respect of food products manufactured or produced in India.
  • Defence Sector: Present FDI regime in this sector permits 49% FDI participation in the equity of a company under automatic route.
  • Now, FDI beyond 49% has now been permitted through government approval route, in cases resulting in access to modern technology in the country or for other reasons.
  • FDI limit also has been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act, 1959.
  • Pharmaceutical Sector: In this sector, 100% FDI under automatic route in greenfield pharma has been approved. FDI up to 100% under government approval in brownfield pharma also has been approved.
  • Aviation Sector: 100% FDI under automatic route in Greenfield and Brownfield Airport Projects to aid in modernization of the existing airports to establish a high standard.
  • Animal Husbandry: 100% FDI allowed in Animal Husbandry (including breeding of dogs), Aquaculture, Pisciculture and Apiculture under Automatic Route without requirement of controlled conditions.
  • Single Brand Retail Trading: Entities undertaking single brand retail trading have been relaxed from local sourcing norms up to 3 years.
  • Entities engaged in of single brand retail trading of products having ‘state-of-art’ and ‘cutting edge’ technology have been relaxed from local sourcing norms up to 5 years.

Comment

With these liberalised changes in FDI Policy, Union government has permitted 100% FDI under government approval route for almost every sector, including defence except in few sectors mentioned in the small negative list.  In this list, FDI continues to be prohibited in atomic energy, lottery, gambling, real estate and Real Estate Investments Trusts (REIT) and railways operations.

Background

Since 2014, Union Government has brought major FDI policy reforms in a number of sectors, including Insurance, Pension Sector, Defence, Construction Development and Broadcasting etc. Measures undertaken by the Union Government have resulted in increased FDI inflows at 55.46 billion dollars in the financial year 2015-16. This was the highest ever FDI inflow in India for a particular financial year.

Union Cabinet gives nod to Civil Aviation MoU between India and Singapore

The Union Cabinet has given its ex-post facto approval for signing a Memorandum of Understanding (MoU) between India and Singapore on cooperation in the field of civil aviation.

The MoU was signed in November 2015 between Airports Authority of India (AAI) on behalf of Union Government and Singapore Cooperation Enterprise (SCE) on behalf of Government of Singapore) during Prime Minister’s visit to Singapore.

Key facts

  • Objective of MoU is to establish mutual cooperation in the field of civil aviation between both countries.
  • It will cover airports of Jaipur and Ahmedabad to begin with cooperation and later will be extended to other airports with mutual consent.
  • The include collaboration in Civil Aviation Sector between both countries will be in the areas of (i) Master-planning and design (ii) Commercial development (iii) Traffic development Training and development (iv) Service quality improvement (v) Maintenance, repair and overhaul (vi) Cargo handling and Management (vii) Operation and management.