India's aviation ministry said Tuesday it supports allowing foreign airlines to invest in the country's cash-hungry carriers, but added that a final decision must be made by the cabinet. Permitting foreign investment could bring much-needed capital for India's cash-strapped Kingfisher, Jet and other airlines, which have been battling to keep in business in the fiercely competitive aviation market.
Foreign investment "is acceptable till a limited point," Civil Aviation Minister Vayalar Ravi told CNBC news channel. But he said the level to which foreign investment should be allowed was still under discussion. He said the aviation ministry had proposed allowing "less than 26 percent" investment by international airlines in domestic carriers.
The industry ministry earlier this month suggested permitting 26 percent foreign investment, saying the domestic airlines were "in dire need of funds" to compete with global carriers. India's airlines may lose a total of $2.5 billion in the year ending in March 2012, according to the Centre for Asia Pacific Aviation, an industry body.
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