Aviation

Germany’s Merkel Arrives in India

Jun. 2 – German Chancellor Angela Merkel arrived in India on Tuesday May 31 for a two day visit, accompanied by four cabinet ministers, several high-ranking officials, members of parliament, and representatives of German businesses, educational institutions and training organizations.

Merkel’s visit to India is to fortify ties between India and German and look forward to greater common cooperation in the fields of environment, energy, security, infrastructure, vocational skills and high tech areas of defense for which agreements are likely to be signed during her visit. Continue reading →

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India to Consider FDI in Domestic Carriers

Jul. 8 – Authorities will soon begin talks on possibly raising foreign direct investment in local carriers to push New Delhi’s recently opened Terminal 3 into becoming an international aviation hub.

“This issue would be discussed in coming few days. A final view may be taken shortly,” Civil Aviation Minister Praful Patel said in a statement. Foreign investors are technically allowed to invest as much as 49 percent in local carriers but the government has been hesitant to allow this over security concerns. Continue reading →

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Mahindra & Mahindra to Establish Special Economic Zone for Aerospace Sector

Jul. 6 – Indian conglomerate Mahindra & Mahindra is in negotiations to establish a special economic zone (SEZ) targeting the aerospace sector industry.

The 250-acre SEZ will be located near Bangalore International Airport following a public private partnership model. M&M is not new to the aerospace industry. The company opened a component-making facility at Malur in Bangalore recently and also has two aircraft manufacturing companies in Australia. Continue reading →

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India to Impose Service Tax on Plane Tickets in July

Jun. 28 – India will soon impose a 10 percent service tax on local and international airfares of Rs. 100 and Rs. 500 respectively whichever is less beginning July 1.

According to the Department of Revenue, 10 percent of the gross value of the ticket or Rs. 100 per journey, whichever is less will be imposed on all local flights. Similarly, international flights in economy class will be charged a service tax worth 10 percent of the gross value of the ticket or Rs. 500, whichever is less. Continue reading →

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Finance Ministry Officials Propose Tax Reforms to Services Sector

May 3 – Finance ministry officials called for reforms to India’s tax structure for services like shipping, aviation and telecom to make them competitive.

In a working paper titled, “Policy for India’s Services Sector,” finance ministry senior economic adviser H.A.C. Prasad and additional economic adviser R. Sathish said that the government should rationalize the tax structure in the shipping industry, which pays 12 direct and indirect taxes currently.

Taxes like corporate tax, minimum alternate tax, dividend distribution tax, withholding tax on interest paid to foreign lenders, wealth tax, VAT, lease tax and service tax raise the effective tax rate of around 2 percent under the tonnage regime to around 9 percent. Continue reading →

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Air India Gets Government Refinancing

Feb. 19 – The Indian government approved an equity infusion of US$177million in two equal monthly installments to the National Aviation Company of India Ltd, the holding company for Air India.

NACIL is currently facing severe financial losses. Costly legacy assets, a weakening revenue stream and high cost structure are resulting in rising liabilities. The equity infusion will help the troubled carrier over its cash flow problem and finance fleet acquisition plans. A meeting of the Cabinet Committee on Economic Affairs, presided over by Prime Minister Manmohan Singh, gave its nod to the fresh equity infusion. Continue reading →

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Stapled Chinese Visas Not Valid for Travel

BBC photo Nov. 13 – India’s Foreign Ministry has announced that stapled Chinese visas for Indian travelers will not be allowed to exit the country and advises applicants to verify how their visas will be attached.

Some Chinese embassies and consulates have continued to issue stapled visas for Indians coming from Arunachal Pradesh, Jammu and Kashmir despite Indian government protests. The practice is China’s way of not recognizing the territories as a part of India.

“It has come to the attention of government of India that the embassy of the People’s Republic of China in New Delhi and the Chinese consulates in Mumbai and Kolkata are issuing visas on a separate piece of paper ‘stapled’ to the passport (rather than pasted as is the usual practice), to certain categories of Indian nationals on the basis of their domicile, ethnicity and/or place of issue of the passport. Such paper visas stapled to the passport are not considered valid for travel out of the country,” said the ministry advisory. Continue reading →

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Ministry Amends Rules for Foreign Arms Companies

Nov. 12- India’s Ministry of Defense has changed rules that could allow foreign arms companies blacklisted pending a bribery case to join tests aimed at modernizing the army.

The ministry banned local and foreign firms in June based on a suspected bribery charge on the former chief of the Ordinance Factories’ Board, Sudipta Ghosh. The new rules could pave the way for blacklisted arms companies to showcase their equipment although they will not be allowed to finalize contracts pending the investigation says The Telegraph.

The Indian Armed Forces is the third largest in the world in terms of size with an active force of 1,414,000 people but severely lacks in modern equipment. The Indian Army for one has not bought heavy artillery in 22 years. Past attempts to equip the military have been delayed so far. Continue reading →

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