Govt permits NRIs to own up to 100% stake in Air India
NRI investments would be treated as domestic investments.
The government on Wednesday permitted NRIs to control up to 100% stake in disinvestment-bound Air India.
The decision comes at a time when the government has sought preliminary bids for 100% stake sale in the national carrier.
“Today’s decision on Air India is one milestone decision where NRIs… will get permission to invest 100% in the airline,” Union Minister Prakash Javadekar told reporters briefing about the cabinet decision.
Non-resident Indians (NRIs), who are Indian nationals, will get permission to participate in Air India’s strategic sale. Earlier, they were allowed to own up to 49% stake, the minister said.
“Now they can take 100%,” he added.
Allowing 100% investment by NRIs in the carrier would also not be in violation of Substantial Ownership and Effective Control (SOEC) norms. NRI investments would be treated as domestic investments.
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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.
Earlier, NRIs were allowed to acquire only 49% in Air India. Foreign Direct Investment (FDI) permit in the airline was also 49% through the government approval route.
As per the existing norms, 100% FDI is permitted in scheduled domestic carriers, subject to certain conditions, including that it would not be applicable for overseas airlines.
In the case of scheduled airlines, 49% FDI is permitted through automatic approval route and any such investment beyond that level requires government nod.
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