January 11, 2018: The Union cabinet has liberalised and simplified the Foreign Direct Investment (FDI) regime, allowing foreign airlines to invest up to 49 percent in Air India, and opening up 100 percent FDI in single-brand retail under the automatic route.

As per the existing rule, foreign airlines can invest, with government approval, in Indian companies operating scheduled and non-scheduled air transport services, up to 49 percent of their paid-up capital. However, this provision was not applicable to Air India, implying that foreign airlines could not invest in the national carrier.

“It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 percent under approval route in Air India subject to the conditions that 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,” the government said.

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