Government approves 100% FDI by NRIs in Air India
New Delhi : The government on Wednesday allowed non-resident Indians (NRIs) to acquire up to 100% stakes in Air India through the automatic route.
Talking about it at a press conference, Union minister Prakash Javadekar announced that the government has approved the idea to raise the limit for NRIs to own stakes in the public carrier from the current 49 per cent.
"Regarding the strategic sale of Air India, Non-resident Indians (NRIs) can now acquire 100 per cent stake in the airlines. Earlier it was 49 per cent," he said.
The announcement came at a time when government is looking forward to sell 100% of stakes of Air India. The last date to submit the bid is March 17, 2020.
According to news agency PTI, permitting NRIs to own 100 per cent in the carrier will not be in violation of Substantial Ownership and Effective Control (SOEC) norms as this would be treated as domestic investments. Under the SOEC framework, which is followed in the airline industry globally, a carrier that flies overseas from a particular country should be substantially owned by that country's government or its nationals.
If current rules are to be judged then 100% FDI is allowed only in scheduled domestic carriers that too under certain conditions, including that it would not be applicable on the overseas airlines.