India set to turn down Qatar Airways bid to launch airline

India’s federal government is likely to turn down a plan by Qatar Airways to launch an airline in the country in the current investment format, a newspaper has revealed quoting a top aviation official.

The Indian Express report quoted Secretary, Ministry of Civil Aviation, RN Choubey, as saying that as per the current rules it was not possible to have an airline entirely owned by Qataris.

“Current policy of the government is that the substantial ownership and effective control should remain with Indian nationals and they will have to comply. You cannot have substantial ownership of more than 50 percent because then you are violating the policy,” Choubey is quoted to have said.

According to him, anyways, no formal proposal has been made by Qatar Airways so far. Qatar Airways Group Chief Executive Akbar al-Baker reportedly told reporters that the rules of allowing a foreign entity to own 100 percent domestic carrier were not clear.

Foreign investment

“What we are given to understand is that an airline cannot own 100 percent. A foreigner can but not an airline. I don’t know what is the difference between a foreigner and an airline. If Qatar Investment Authority own 51 and I own 49 that is not allowed. Again, this is very ambiguous. The rule is not very clear,” al-Baker is quoted to have said.

“If he thinks that he should have an airline that is entirely owned by Qataris, presently it is not possible. If he thinks that he can run an airline that is 49 percent foreign owned 51 percent Indian owned, that is possible. They will have to find an Indian partner and it is possible,” Choubey said.

As per India’s foreign direct investment (FDI) rules for civil aviation sector, scheduled air transport service or domestic scheduled passenger airlines can have 100 percent FDI through the automatic route as long as the investment is made by non-resident Indians (NRIs).

For other entities or persons, 49 percent FDI through automatic route is allowed and beyond that government approval is required.