Air safety v/s commercials - take your pick

According to this report, it looks like the FAA may downgrade India from Category 1 to Category 2, in its safety rankings. The FAA conducts the International Aviation Safety Assessment Program assessing the Civil Aviation Authority of each country which has carriers operating to the US. This is because the FAA cannot evaluate a foreign carrier within its own sovereign state; each country is responsible for the safety oversight of its own air carriers.

Category 1 means the air carriers from the assessed state may initiate or continue service to the United States in a normal manner and take part in reciprocal code-share arrangements with U.S. carriers. However, Category 2 means the air carriers from the assessed state cannot initiate new service and are restricted to current levels of any existing service to the United States while corrective actions are underway.

But here's the best bit! Because this will affect existing India-based airlines that fly to the US (AI, 9W) and the plans that Air Asia India and Tata-SIA JV have, this could affect all of them, and by implication, the country's aviation profile as a whole. And so the authorities (whoever they are) seem to have a backup reactionary plan in place - an embargo on Dreamliner purchases. In effect, this is a veiled threat.

Now, I'm not an air safety expert, and so I don't know what the bases for the proposed downgrade are, but I think the response isn't appropriate at all, irrespective of the circumstances. As a matter of principle, India should be looking to up its standards - if that is the core reason for the proposed downgrade. Countering a technical deficiency with a commercial threat doesn't look, sound, or read right at all.

What do you think?