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A Group of Ministers (GOM) is likely to recommend import of jet fuel (Aviation Turbine Fuel or ATF) on a case by case basis. At its meeting here the inter-ministerial group is also likely to discuss a proposal to allow foreign airlines to pick up equity in domestic airlines.
A person familiar with the development said, “There may not be any policy change and all the airlines will not be automatically granted approval to import.” Kingfisher is expected to be asked to apply fresh with changed norms.
Once the GOM recommends and the Directorate General of Foreign Trade (DGFT) notifies a change, such request will be considered on the basis of Clause 2.5 of the Foreign Trade Policy. Kingfisher wrote a letter on October 5 requesting the DGFT to allow import of jet fuel for captive requirement.
At present rules say that ATF can be imported only by State trading enterprises or by those companies who have been granted rights for marketing of fuels by the Petroleum Ministry. In case direct import licence is granted, that can be done only through Indian Oil. In its letter Kingfisher requested for a change in the policy to allow free import by the airline.
The rule can be relaxed as a special case under Clause 2.5 of the trade policy. According to the clause, the DGFT may pass such orders or grant such relaxation or relief, as he may deem fit and proper, on the grounds of genuine hardship and adverse impact on trade.
The airline in its letter argued that the domestic pricing of the jet fuel is not controlled and does not enjoy any subsidy. It assured that it will make arrangements with service providers for storage and handling at ports for service at ‘Open Access' airports such as Delhi, Hyderabad and Bangalore.
Meanwhile, the GoM is also likely to consider change in the foreign investment norms for the airlines. Present norms say that barring foreign airline any foreign investors can invest up to 49 per cent in domestic airline. The Department of Industrial Policy and Promotion , nodal ministry for FDI, is working on a proposal for making a change in the policy.
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