DGCA Guidelines for FDI in Civil Aviation Sector

The foreign direct investment
(FDI) regime in the civil aviation sector has been progressively liberalized
over a period of time. The latest
was effected in by the Department of Industrial Policy &
Promotion, Government of India in September 2012 by which foreign airlines are
now allowed to invest in the Indian civil aviation sector up to a limit of 49%
under the Government approval route.
Last week, the Director General
of Civil Aviation (DGCA) issued the “Guidelines for Foreign Direct
Investment in the Civil Aviation Sector
” which plays the role of operationalizing
the revised FDI regime. It deals with the specific rules pertaining to various
aspects of the civil aviation sector separately: (i) scheduled air transport
service / domestic scheduled passenger airline, (b) non-scheduled air transport
service / non-scheduled airlines / chartered airlines, (c) cargo airlines
(scheduled or non-scheduled), (d) helicopter services / sea plane services, and
(e) maintenance and repair organizations, flying training institutes and
technical training institutes.
In each of these types of
activity, the issues pertaining to direct or indirect FDI, rules regarding
management, personnel, information to be submitted to obtain government
permissions and similar matters have been extensively dealt with.

The move to allow foreign
airline participation has generated a tremendous interest on the part of foreign
airlines in the Indian civil aviation sector (

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.


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