“Substantial ownership and effective control of M/s Air India Limited shall continue to be vested in Indian Nationals as stipulated in Aircraft Rules, 1937,” Department of Economic Affairs (DEA) said in a notification.
As per the notification, foreign investments in Air India, including that of foreign airlines shall not exceed 49% either directly or indirectly except in case of those NRIs, who are Indian nationals, where foreign investments is permitted up to 100% under automatic route.
The Union Cabinet, had in March, approved changes in FDI norms that allowed NRIs to bid for 100% shares owned by the government in national carrier Air India in a move to make its disinvestment process more attractive as previous attempts to attract buyers were unsuccessful.
The government has put its entire stake in Air India up for sale. Previously, NRIs could own up to 49% in the carrier.
India allows upto 49% FDI under the automatic route, government route beyond that and up to 100% for NRIs in scheduled air transport service/ domestic scheduled passenger airline, and regional air transport service. Air transport services also include non-scheduled services, helicopter and seaplane services.
“Foreign airlines are allowed to participate in the equity of companies operating cargo airlines, helicopter and seaplane services, as per the limits and entry routes,” DEA said.
Foreign airlines are allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paid-up capital, subject to certain conditions such as those would be made under the approval route, and the 49% limit will subsume FDI and FII/FPI Investment, it said.