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A long-standing proposal for the Tata industrial group and Singapore International Airlines (SIA) to form a joint-venture private airline has received support from India's industry minister.

However, the all-clear given by the minister, Murasoli Maran, is sharply at odds with the position of Civil Aviation minister C.M. Ibrahim, who has said he does not want foreign airlines holding equity stakes in domestic private airlines.

The Tata-SIA venture was first proposed to the Prime Minister's Office, and subsequently ratified by the country's Foreign Investment Promotion Board.

It could be the main bone of contention at the meeting of Indian Prime Minister Deve Gowda's cabinet, scheduled for today.

The cabinet is set to discuss domestic civil aviation policy, which has been in a state of flux since the Indian aviation industry was thrown open in 1990.

Mr Maran said he had good reasons for supporting the venture. 'No good proposal should be held back; and there is no doubt that the Tata-SIA venture is a solid proposal,' he said.

Ratan Tata, chairman of the Tata group, said he was less certain of the future of the proposal, which had been under examination for the past 18 months.

'The view of the civil aviation ministry has been that there is no parking space and no counter space at the airports, and the skies are crowded,' he said. Mr Tata said the civil aviation ministry's latest position was that until the infrastructure was in place there should be no expansion.

'So, I am not sure whether they will grant us the permission,' Mr Tata said An economic liberalisation programme, launched by while former Indian Prime Minister P.V. Narasimha Rao was in power, was the starting point for the opening up of the country's aviation sector.

Subject to government approval, foreign companies can obtain up to a 40 per cent stake in an Indian domestic airline.



Minister gives support to bid by SIA-Tata to operate airline