Using FDI for a bailout

The civil aviation ministry has mooted a proposal to allow foreign airlines to buy up to 24 per cent in Indian airline companies. Foreign direct investment (FDI) of up to 49 per cent is allowed in the sector; but foreign airlines cannot invest, whereas soap manufacturers can. The proposal to permit airlines is expected to work its way through the government and eventually get Cabinet approval. Whether the Cabinet will accept the 24 per cent limit or go with the Department of Industrial Policy and Promotion (which is in favour of a 26 per cent cap) is a key question.

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