Union minister Prakash Javadekar said the Cabinet has approved the decision to raise the limit from the current 49 per cent.
The government on Wednesday permitted NRIs to own up to 100 per cent stake via automatic route in disinvestment-bound Air India.
Briefing the media, Union minister Prakash Javadekar said the Cabinet has approved the decision to raise the limit from the current 49 per cent for NRIs to own stakes in the public carrier.
"Regarding the strategic sale of Air India, now Non-resident Indians (NRIs) can acquire 100 per cent of stake in the airlines. Earlier it was 49 per cent," he said.
The decision comes at a time when the government is looking to sell 100 per cent stake sale in the national carrier and has set a 17 March deadline for submitting bids.
According to news agency PTI, allowing 100 per cent investment by NRIs in the carrier would also not be in violation of Substantial Ownership and Effective Control (SOEC) norms as they would be treated as domestic investments.
Under the (SOEC) framework, which is followed in the airline industry globally, a carrier that flies overseas from a particular country should be substantially owned by that country's government or its nationals.
As per the existing norms, 100 per cent 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 per cent FDI is permitted through automatic approval route and any such investment beyond that level requires government nod.
On 27 January, the government came out with a Preliminary Information Memorandum (PIM) for Air India disinvestment.
It proposed selling 100 per cent stake in Air India along with budget airline Air India Express and the national carrier's 50 per cent stake in AISATS, an equal joint venture with Singapore Airlines.
Under the latest disinvestment plan, the successful bidder would have to take over only debt worth Rs 23,286.50 crore while the liabilities would be decided depending on current assets at the time of closing of the transaction.
This is the second attempt by the government in as many years to divest Air India, which has been in the red for long.
The government on Wednesday permitted NRIs to own up to 100 per cent stake via automatic route in disinvestment-bound Air India.
Briefing the media, Union minister Prakash Javadekar said the Cabinet has approved the decision to raise the limit from the current 49 per cent for NRIs to own stakes in the public carrier.
"Regarding the strategic sale of Air India, now Non-resident Indians (NRIs) can acquire 100 per cent of stake in the airlines. Earlier it was 49 per cent," he said.
The decision comes at a time when the government is looking to sell 100 per cent stake sale in the national carrier and has set a 17 March deadline for submitting bids.
According to news agency PTI, allowing 100 per cent investment by NRIs in the carrier would also not be in violation of Substantial Ownership and Effective Control (SOEC) norms as they would be treated as domestic investments.
Under the (SOEC) framework, which is followed in the airline industry globally, a carrier that flies overseas from a particular country should be substantially owned by that country's government or its nationals.
As per the existing norms, 100 per cent 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 per cent FDI is permitted through automatic approval route and any such investment beyond that level requires government nod.
On 27 January, the government came out with a Preliminary Information Memorandum (PIM) for Air India disinvestment.
It proposed selling 100 per cent stake in Air India along with budget airline Air India Express and the national carrier's 50 per cent stake in AISATS, an equal joint venture with Singapore Airlines.
Under the latest disinvestment plan, the successful bidder would have to take over only debt worth Rs 23,286.50 crore while the liabilities would be decided depending on current assets at the time of closing of the transaction.
This is the second attempt by the government in as many years to divest Air India, which has been in the red for long.
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