The Foreign Investment Promotion Board (FIPB), on Friday, deferred its decision on Rs.2,060 crore Jet Airways-Etihad deal seeking clarity on management control, following equity infusion by the Gulf airline, reports said.
The two airlines should have obtained the FIPB clearance first, before actual equity infusion. In April the two airlines announced strategic alliance under which Etihad would pick up 24 percent stake in Jet Airways for around Rs.2,060 crore.
The two airlines have also signed a commercial agreement increasing marketing tie-up and technical co-operation. Jet will also set up its hub in Abu Dhabi but additional flights depends on the Indian government clearing the revised traffic rights agreement with Abu Dhabi.
The FIPB's decision to postpone decision follows the Securities and Exchange Board of India's (SEBI) concerns on substantial management rights to Etihad under the deal. Besides, it sought more details on "effective control" and ownership, department of economic affairs secretary Arvind Mayaram said.
Last month Jet shareholders approved the deal and also issue of preference shares to Etihad, but Jet management deferred the proposal to amend airline's article of association due to protest from shareholders and SEBI's concerns. Subsequently, the two airlines amended their shareholder agreement.
The modified agreement ensured that Etihad will not have the unilateral right to terminate the commercial cooperation agreement and this right will now be held by both sides. Also, the agreement has been re-worked to ensure there is no ambiguity with respect to special rights and veto powers.
The Jet-Etihad deal and the grant of additional traffic rights to Abu Dhabi also has come under fire with a parliamentary standing committee on aviation questioning the government's decision. The committee headed by CPI (Marxist) MP Sitam Yechury has demanded that the government reconsider the bilateral agreement it signed with Abu Dhabi and freeze the seat entitlement to pre-revised level of 13,000 seats/week. Also Janata Party chief Subramanian Swamy has threatened to file a public interest litigation on the issue.
Civil aviation minister Ajit Singh told media persons that SEBI had asked the two airlines to rework parts of the agreement and added that he did not foresee problems in securing approvals.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.