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The demand came about as India and UAE have in-principle agreed to ink a bilateral investment promotion and protection agreement to boost the two-way trade.
On Sunday Etihad Airways chairman and crown prince Sheikh Hamed bin Zayed al-Nahayan told media that the airline needs to revise the deal and it is too soon to say when a final agreement will be signed. The development dragged down Jet Airways stock on Bombay Stock Exchange and it fell 7.70% to close at Rs 570.75 on Monday.
Commerce and Industry Minister Anand Sharma and Chairman of the Abu Dhabi Crown Prince Court Sheikh Hamed discussed issues related to trade and investment at a meeting in Abu Dhabi today.
"We talked about the need to have an investment protection agreement. We have in-principle agreed for that and it will be expeditiously concluded," Sharma told reporters after the meeting. Sharma said, "I have assured them that within the limit of our laws, India will protect the investments."
"Etihad wants assurance that it does not meet the same fate as Etislat,'' said a civil aviation ministry official. Last February Abu-Dhabi -based telecom company Etislat had to pull out of India and shut down operations of Etislat DB, its joint venture in India following the Supreme Court decision to cancel 121 licences in 2G scam.
Etihad is expected to pick up 24% stake in Naresh Goyal owned Jet Airways in a deal valued between Rs 1600-1700 crore and an agreement was expected to be signed this week. Asked if a Jet deal would be finalised soon, Sheikh Hamed said: "It's too early to decide."We need to talk with the Indians about other issues including this," he said.
Earlier in the month, Etihad top brass called on civil aviation minister Ajit Singh and his colleagues finance minister P Chidambaram and commerce minister Anand Sharma to apprise them about their talks with Jet and interest in Indian civil aviation market. In a subsequent press conference Etihad chief executive officer James Hogan said due diligence findings will be presented to the airline board in a week and then it will take a decision on investing in Jet. Hogan said Etihad management met Singh to understand the new foreign direct investment rules and the issues impacting civil aviation in India.
Air India too has been raising concerns that the Jet-Etihad deal would weaken the national carrier and adversely impact its international business. The airline chairman Rohit Nandan had written to civil aviation secretary K N Srivastava expressing concerns about the deal
In a letter to Civil Aviation Secretary K N Srivastava, Air India Chairman and Managing Director Rohit Nandan had raised concerns over the potential threat to the airline from the Jet-Etihad deal. In the letter, written in December 2012, Air India had expressed concerns that allowing investments by foreign airlines would hurt the interests of domestic airlines and prevent Indian airports from developing into international hubs. It added that Jet’s flights to Abu Dhabi could be used to carry passengers from India headed for the US and Europe,
However civil aviation minister Ajit Singh had dismissed Air India's concerns saying that the decision to liberalise norms was taken in interests of the sector and not any particular airline. Singh also government could not impose restrictions or cap Jet Airways flights to Abu Dhabi.
