Following on from its recently unveiled Civil Aviation Policy, the Indian government has revised laws governing the foreign ownership of local passenger carriers.

In a statement, New Delhi said it has now increased the cap on Foreign Direct Investment (FDI) from the previous 49% to 100% albeit with certain restrictions applied and with government approval.

Under its revised terms, foreign carriers may still only hold a maximum of 49% in Indian passenger carriers but the remaining 51%, instead of being allocated to Indian nationals only, will now be available to other foreign firms. In essence, foreign entities that are not airlines are now allowed to own 100% of Indian "scheduled air transport service/domestic scheduled passenger airlines and regional air transport service" operators.

At present, India counts several carriers with large-scale foreign investment the largest of which are: Jet Airways (JAI, Mumbai International) (with Etihad Airways (EY, Abu Dhabi International) holding 24%); AirAsia India (Bangalore International) (with AirAsia (AK, Kuala Lumpur International) holding 49%); and Vistara (UK, Delhi International) (with Singapore Airlines (SQ, Singapore Changi) holding 49%).

Combined with heavily revised conditions governing local carriers' access to international markets, Prime Minister Narendra Modi has set the tone for a far more liberalized domestic aviation sector.

"These amendments seek to further simplify the regulations governing FDI in the country and make India an attractive destination for foreign investors," his office said.