NRIs can buy 100% stake in Air India

New Delhi: The central government on Wednesday permitted NRIs to control up to 100 per cent stake in disinvestment-bound Air India.

The decision comes at a time when the government has sought preliminary bids for 100 per cent stake sale in the national carrier. The decision was taken in a meeting of the Union Cabinet, chaired by Prime Minister Narendra Modi. However, foreign investments in the national carrier including that of foreign airlines shall not exceed 49 per cent, either directly or indirectly, an official statement said. It said that the condition that substantial ownership and effective control of Air India shall continue to be vested in Indian nationals.

Although 100 per cent FDI is permitted under automatic route for NRIs in scheduled air transport service/domestic scheduled passenger airline, it is restricted to be only 49 per cent in Air India, the statement said.

"To permit foreign investment up to 100 per cent by those NRIs, who are Indian nationals, in case of Air India Ltd, the Union Cabinet has approved to amend the extant FDI policy to permit foreign investment in Air India Ltd by NRIs, who are Indian nationals, up to to 100 per cent under automatic route," the statement said.

It said that in light of the proposed strategic disinvestment of 100 per cent of Air India by the government, it has been decided that foreign investment in Air India be brought on a level playing field with other scheduled airline operators. The national carrier will have no residual government ownership and will be completely privately owned.

The amendment "are meant to liberalise and simplify the FDI policy to provide ease of doing business in the country," it said, adding it would lead to largest FDI inflows and thereby contributing to growth of investment, income and employment.