February 05, 2020

Clause Which Restricts Air India FDI To 49% To Be Deleted

[ By Bobby Anthony ]


The Union Civil Aviation Ministry has asked the Department for Promotion of Industry and Internal Trade (DPIIT) to delete the specific clause which currently restricts foreign direct investment (FDI) in Air India to 49%.

A draft note has been circulated on the issue seeking comments from different ministries.

The development is part of steps being taken by the government to allow 100% FDI in Air India.

Currently, FDI in Air India is capped at 49% through the government approval route while 100% FDI is permitted in scheduled domestic carriers, subject to certain conditions, including that it would not be applicable for overseas airlines.

Allowing 100% FDI in Air India would allow Non-Resident Indians (NRIs) to invest up to 100%.

Currently, they can acquire only 49% in the national carrier.

It may be recalled that, making a second attempt to divest loss-making Air India, the government came out with the Preliminary Information Memorandum (PIM) for 100% stake sale on January 27, 2020.

Besides, Air India's 100% stake in budget airline Air India Express and 50% shareholding in AISATS, an equal joint venture with Singapore Airlines, have also been offered for sale.

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