100% Foreign Direct Investment via automatic route for aircraft MRO

 The Indian government now allows 100% FDI in the Maintenance, Repair and Overhaul (MRO) sector through the automatic route.

This means foreign investors can invest without prior approval from the government.

Uniform 5% IGST: A uniform 5% Integrated Goods and Services Tax (IGST) is applied on the import of parts, components, and tools for aircraft. This is aimed at reducing the cost of imports for the MRO industry.

Boost to Domestic MRO Industry: These measures are expected to enhance the competitiveness of the Indian MRO sector, attracting more foreign investment and fostering growth and innovation within the industry.https://www.iasjnana.com/

Economic Impact: The policy change is anticipated to create more jobs, improve the skill levels of the workforce, and contribute to the overall growth of the Indian aviation sector.

Strategic Importance: By strengthening the MRO sector, India aims to become a global hub for aircraft maintenance and repair, reducing dependency on foreign MRO services.

What is FDI policy in India 1991?

The industrial policy of 1991 and subsequent amendments provide a very liberalized policy framework to attract foreign direct investment (FDI) into the country.

FDI Entry Routes

FDI under sectors is permitted either through the Automatic route or Government route. Under the Automatic Route,

the non-resident or Indian company does not require any approval from the Government of India.

Whereas, under the Government route, approval from the Government of India is required prior to investment. Proposals for foreign investment under the Government route are considered by the respective Administrative Ministry/Department.

List of prohibited sectors: *Lottery Business including Government/ Private lottery, online lotteries etc.

Chit Funds

Trading in Transferable Development Rights (TDR)

Manufacturing of Cigars, cheroots, cigarillos, and cigarettes (tobacco or tobacco substitutes) Gambling and betting including casinos*

Nidhi Company

**Real Estate Business or Construction of Farm Houses

Sectors not open to private sector investments – atomic energy, railway operations (other than permitted activities mentioned under the consolidated FDI Policy)

FDI from countries that share a land border with India, such as China, Pakistan, Bangladesh, Afghanistan, etc. Investments from these countries require government approval, regardless of the FDI cap in the sector concerned.

What are the Recent Amendments in FDI Policy for the Space Sector?

100% FDI Allowed: Under the amended policy, 100% FDI is permitted in the space sector, aiming to attract potential investors to Indian space companies.

Up to 74% under Automatic Route: Satellites-Manufacturing & Operation, Satellite Data Products, Ground Segment & User Segment.

Beyond 74%, the government route applies.

Up to 49% under Automatic Route: Launch Vehicles, associated systems or subsystems, Creation of Spaceports.

Beyond 49%, the government route applies.

Up to 100% under Automatic Route: Manufacturing of components and systems/sub-systems for satellites, ground segment, and user segment.https://www.iasjnana.com/