Foreign Direct Investment Policy -“Establishing a Lasting Interest”-The impact on Indian Aviation Industry

Abstract

To attract the Foreign Direct Investment, Government of India has put in place an updated policy framework The intent of this seems to promote a stake holding which is much more than a mere financial interest partnership. The broad objective is a regulatory mechanism which is transparent, shall help accelerate the economic growth and nurture the skill. It is expected to at the same time help evolve technology. The government seems very clear in its thought process and is promoting FDI as an investment, which is an instrument of enterprise development rather than portfolio investment. The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India  has on 28^th August,2017 released its updated policy framework –“Consolidated FDI Policy”. The tag line seems to be:” establishing a ‘lasting interest’ in an enterprise that is resident in an economy other than that of the investor”.Thus, in the present avatar, the intent of the consolidated framework on FDI seems to be –‘a Win-Win Scenario” for the enterprise as well as for the investor. For the aviation industry, it definitely is an exciting and challenging opportunity. The rules of the game have been clearly defined. There is a platter of options of investment. The parameters are in place and of course, due diligence in terms of limited control and assessment in the interest of the Nation, enterprise and the impact on the end users seems to be a new modern swadeshi approach. The holistic policy also point at a well intended long term resilient impact on the connectivity, modernization and infrastructure development of aviation in India.