The Government of India’s union cabinet has granted an approval to revise its foreign direct investment (FDI) policy to allow foreign airlines to own up to 49% in the state-owned carrier Air India.
The existing policy allows up to 100% foreign investment in the scheduled and non-scheduled operators, while foreign airlines are permitted to invest up to a limit of 49% of their paid-up capital.
These provisions were not applicable to Air India, but the new policy has paved way for the foreign airlines to invest in the debt-ridden national carrier.
According to the revised policy, foreign airlines can own up to 49% in Air India, if the substantial ownership and effective control of the carrier are vested in an Indian national.
Indian Civil Aviation Minister Ashok Gajapathi Raju was quoted by PTI as saying: “The Cabinet decision means Air India is on par with other airlines within the country.
“Air India’s woes are basically financial.”
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By GlobalDataLast year, the union cabinet agreed in-principal to divest Air India and approved the formation of an inter-ministerial group to outline a related strategy.
