Lok Sabha Question No. 266 (STARRED), answered on 2020-03-12
Subject: Air Connectivity and International Trade
Ministry: CIVIL AVIATION
Asked by: Shankar Lalwani, Durga Prasad Rao Balli

*266.

## GOVERNMENT OF INDIA MINISTRY OF CIVIL AVIATION LOK SABHA

STARRED QUESTION NO. : 266 (To be answered on the March 2020) 12th

## AIR CONNECTIVITY AND INTERNATIONAL TRADE

SHRI SHANKAR LALWANI SHRI BALLI DURGA PRASAD RAO

Will the Minister of CIVIL AVIATION

be pleased to state:-

- (a) whether the Government has formulated  any scheme for improving air connectivity with the world t0 increase our international trade and if the details thereof; and SO,
- (b) the   steps   taken/proposed to be taken by the Government to solve major issues in the civil aviation sector such as the  privatisation of Air India, speedier resolution of the Jet Airways crisis, inclusion of AviationTurbine Fuel in the GST regime, liberalisation of the bilateral regime and   relaxing the tax   regime for the maintenance, repair and overhaul sector?

## ANSWER

Minister of State (IC) in the Ministry of CIVIL AVIA TION

(Shri Hardeep Singh Puri)

(a) to (b): A statement is laid on the Table of the House:

## STATEMENT TO BE LAID ON THE TABLE OF THE LOK SABHA IN REPLY TO STARRED QUESTION NO. 266 REGARDING AIR CONNECTIVITY AND INTERNA TIONAL TRADE\_

- (a): India has adopted an open sky policy for cargo flights; under which foreign airlines are allowed to operate any number of non-scheduled all-cargo flights to/from any destination in India:

The Government has also endeavoured to include clause for open for cargo flights in various bilateral Air Service Agreements and in large number of agreements; such clause has already been included: sky

- (b): The steps taken/proposed to be taken by the Government to solve the major issues in the civil aviation sector are as under:-

## i, Privatisation of Air India:

The Government, consequent to the approval by Air India Specific Alternative Mechanism (ASAM), has issued a Preliminary Information Memorandum (PIM) inviting Expression of Interest for sale of 100% equity share capital of Air india Limited (AIL); including AIL's 100% shareholding in the Air India Express Limited (AIXL) and 50% shareholding in Air India SATS Airport Services Private Limited (AISATS) on 27.01.2020. Corrigendums have been issued wherein time period upto 06.03.2020 was for submission of written queries on PIM and Share Purchase Agreement (SPA): Last date for release of response to queries on PIM (and SPA, if so provided by the Government of India (GOI) at its discretion) is 16.03.2020. The process has been divided into two stages. In the stage L Expression of Interest will be submitted Interested Bidders and will be shortlisted based on eligibility criteria and other terms mentioned in the Preliminary Information Memorandum (PIM). In the stage-II, shortlisted interested bidders will be provided with Request for Proposal (RFP) and thereafter there will be a transparent bidding process Expression of Interest in response to PIM any group or entity will be submitted to the Transaction Adviser only. given by they by

## ii. Resolution of the Jet Airways crisis:

Government of India has no role in raising funds for M/s Jet Airways (India) Limited; as it is the internal matter of the airline: National Company Law Tribunal (NCLT); Mumbai has admitted an application filled by State Bank of India (SBI) under the Insolvency & Bankruptcy Code; 2016 (BC) on 20th June, 2019 to work out a resolution under the said code. Revival of the airline is now possible only under IBC. plan iii. Inclusion of Aviation Turbine Fuel (ATF) in the GST regime:

As per Article 279 A (5) of the Constitution, the Goods and Service Tax

Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel (ATF): As per the section 9(2) of the CGST Act, inclusion of these products\_in GST will require recommendation of the GST Council. So the GST Council has not made any recommendation for inclusion of natural gas and ATF under GST: far,

## iv. Liberalisation of the bilateral regime:

The Air services agreements provide the legal framework for operation of Air services between countries and are based on the principles of sovereignty 0f nations, nationality of carriers and reciprocity in terms of commercial opportunities for the airlines of each side. The bilateral traffic rights are exchanged between the countries after cautious negotiations within the mandate provided by an Inter-Ministerial group based on various factors:

Some of the measures taken towards liberalization of the bilateral regime include the open sky arrangement On reciprocal basis with SAARC countries and countries located beyond a 5000 km radius from New Delhi, open sky policy for the designated carriers of SAARC (except Pakistan & Afghanistan) & ASEAN countries to mount unlimited operations tolfrom 18 tourist destinations in India, namely, Ahmedabad, A mritsar, A urangabad, Goa, Guwahati, Jaipur; Khajuraho, Lucknow, Patna, Port Blair, Thiruvananthapuram; Tiruchirappalli; Varanasi and Vishakapatnam: Gaya,

## V Relaxing the tax regime for the maintenance; repair and overhaul (MRO) sector:

The major initiatives taken from time to time under the National Civil Aviation Policy (NCAP) 2016 and other recent ones for creation of a congenial atmosphere for broad-based development of MRO in the country, inter alia, include the following:

- Exempted Customs Duty on tools and tool kits,
- Simplified clearance processing of parts,
- Reduced Goods and Services Tax rates on various spare parts; accessories, and consumables,
- Relaxed restriction on utilization of duty-free parts from one year to three years,
- Revised the Notification to enable export of serviceable parts,
- Extended stay in India of foreign aircraft for entire duration of MRO work or 6 months, whichever is lesser,
- Permitted 100% Foreign Direct Investment via automatic route for MRO,
- 2 Prescribed modalities for concessional temporary imports of spare parts by
- Liberalised policy for borrowing and lending in Foreign Currency and Rupees on competitive terms for MROs,

foreign airlines for repair of their aircraft in transit; and 2 Prescribed the policy provisions for allotment of iand by Airports Authority of India (AAI) to promote MROs at AAI airports:

Directorate General of Civil Aviation (DGCA) has framed the requirements and guidelines for granting the approval to MRO organizations under Civil Aviation Requirement (CAR) 145 for maintaining Indiaregistered aircraft: The regulations are based on International Civil Aviation Organization (ICAO) standards and have been harmonized with European Aviation Safety Agency (EASA) regulations  These regulations are amended from time to time based on amendment to ICAO standards and EASA regulations for enabling Indian MRO industry to obtain EASA approvall certification.

DGCA approves training organizations under the provisions of CAR147 for skilling manpower to obtain Aircraft Maintenance Engineers (AME) licenses; Currently in India; there are 46 approved training organizations to conduct basic training and 12 type-training organizations.

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