The government has reworked terms of the Air India sale to allow non-resident Indians to own 100 percent of the disinvestment-bound airline.
"Today's decision on Air India is one milestone decision where NRIs...will get permission to invest 100 percent in the airline," Union Minister Prakash Javadekar told reporters, while briefing them about the cabinet decisions taken on Wednesday.
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 percent stake, the minister said. "Now they can take 100 percent.”
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Allowing 100 percent investment by NRIs in the carrier would also not be in violation of Substantial Ownership and Effective Control norms. NRI investments would be treated as domestic investments.
Under the SOEC framework, which is followed in the aviation 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 buy only 49 percent in Air India. Foreign direct investment too was limited to 49 percent through the government approval route.
According to the existing norms, 100 percent 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 percent FDI is permitted through automatic route and any such investment beyond that level requires government nod.
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