100% FDI in Single-Brand Retail & Construction, Foreign Airlines Allowed to Invest up to 49% in Air India, Says Government
It must be noted that the existing rules allow foreign airlines to own as much as 49% in an Indian airline, except for Air India.
New Delhi, January 10: The government on Wednesday allowed foreign airlines to invest up to 49% in Air India through government approval route ahead of its proposed privatisation. With the latest decision, the restriction on foreign airlines investing in the national carrier has now been removed, making Air India move towards disinvestment. It must be noted that the existing rules allow foreign airlines to own as much as 49% in an Indian airline, except for Air India.
On Wednesday, the government noted that applicability of this ruling would be subject to two conditions- foreign investment(s) in Air India including that of foreign Airline(s) shall not exceed 49 percent, either directly or indirectly; and substantial ownership and effective control of Air India shall continue to be vested in Indian National.
According to reports by ANI, foreign airlines have now been allowed to invest under Government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 percent of their paid-up capital as per the extant policy, However, this provision was presently not applicable to the national carrier, thereby implying that foreign airlines could not invest in Air India. However, this provision has been eliminated, thereby creating opportunities for foreign airlines to invest up to 49 percent under approval route in Air India, subject to the conditions, ANI reported.
To recall, Air India in under a debt burden of more than Rs 52,000 crore. Reports state that the previous UPA Government had extended a bailout package worth little over Rs 30,000 crore to the national carrier for a ten-year period, starting from 2012. Also, in November 2017, Air India was slated to receive a loan worth Rs 1,500 crore from the Bank of India towards the former’s working capital requirements. Reports state that Air India had borrowed around Rs 3,000 crore as short tenure loans from two lenders – the IndusInd Bank and the Punjab National Bank.
(The above story first appeared on LatestLY on Jan 10, 2018 09:42 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).