INDIA'S BLUE DART SEEKS CONTINUED 100% FDI IN EXPRESS COURIERS

NEW DELHI, Sep 17, 2007 (AsiaPulse via COMTEX) --

Courier major Blue Dart Express (BSE:526612) has sought continuation of the 100 per cent foreign direct investment for the industry even as the Centre plans to introduce the Post Office Act (Amendment) Bill in the winter session of Parliament.

At present, 100 per cent foreign equity is allowed in domestic express companies. The bill proposes to bring down the ceiling to 49 per cent, raising concerns for the industry.

Foreign companies such as DHL (which holds 81 per cent in Blue Dart), FedEx and new entrants such as TNT have substantial interest in the growing Indian market.

"The bill in the current form is retrograde. On one hand, the government wants more FDI by opening up the economy and on the other, you take a step backward. If there was no FDI allowed in the sector from the beginning, then any limit, be it 49 per cent or more can be considered. But if there is already 100 per cent FDI allowed, why go back? People have invested huge amount of money in the sector under this policy," Blue Dart MD Anil Khanna said.

Postal department officials said the bill could be introduced in the winter session of the Parliament. It is preparing to move Cabinet for approval.

Khanna is not in favour of regulating a sector either which he says is doing well.

"We don't mind amendment of a law which is exceedingly old and needs to be modified. But the proposals are out of sync with global practices. If we look at the price-multiple globally, it is to the mail segment. Here the Postal Department is suggesting that the price multiple is made to the Speed Post. We don't mind price multiple to the mail."

(PTI)

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