New Delhi (NVI): In a big move, the government today cleared the way for NRIs to control up to 100 per cent stake in disinvestment-bound Air India.
In a high-level meeting chaired Prime Minister Narendra Modi today, the Union Cabinet approved to amend the extant FDI Policy to permit Foreign Investment in Air India Ltd by NRIs, who are Indian Nationals, upto to 100 per cent under automatic route, the Government said in an official statement here.
As per the present Foreign direct investment (FDI) Policy, 100 per cent FDI is permitted in scheduled Air Transport Service and Domestic Scheduled Passenger Airline (automatic upto 49 per cent and government route beyond 49 per cent).
However, for NRIs 100 per cent FDI is permitted under automatic route in scheduled air transport service and domestic scheduled passenger airline.
Further, FDI is subject to the condition that substantial ownership and effective control (SOEC) shall be vested in Indian Nationals as per aircraft rules, 1937, the Government said.
However, as per the present policy, foreign investment in Air India including that of foreign Airline shall not exceed 49 per cent, either directly or indirectly, subject to the condition that substantial ownership and effective control of Air India will continue to be vested in Indian Nationals.
Therefore, although 100 per cent FDI is permitted under automatic route for NRIs in scheduled air transport service and domestic scheduled passenger airline, it is restricted to be only 49 per cent in case of Air India.
In light of the proposed strategic disinvestment of 100 per cent by the government, Air India will have no residual government ownership and will be completely privately owned, it has been decided that foreign investment in Air India Ltd be brought on a level playing field with other scheduled airline operators.
The amendment in FDI policy will permit foreign investment in Air India Ltd at par with other Scheduled Airline Operators that is upto 100 per cent in Air India Ltd by those NRIs, who are Indian Nationals.
The proposed changes in FDI Policy will enable foreign investment by NRIs into Air India upto 100 per cent, under automatic route.
Above amendments to the FDI Policy are meant to liberalise and simplify the FDI policy to provide ease of doing business in the country. Leading to largest FDI inflows and thereby contributing to growth of investment, income and employment.
