What will be the implications for NRIs being permitted to own up to 100% stake in Air India. How will it impact private airlines like Indigo and Spice Jet?
Answer
Answer
The Union cabinet approved a proposal to allow NRIs to own up to 100% stake in Air India as the government is keen to push through the divestment to give a boost to its full year divestment revenues. The amended FDI policy will permit NRIs to invest up to 100% under the automatic route in Air India. To sweeten the deal, the government has reduced Air India’s debt from about Rs.56,334 crore to about Rs.23,287 crore. Effectively, NRIs and Overseas Citizens of India (OCI) will now be permitted to invest up to 100% in scheduled air transport services under the automatic route. Earlier, the limit including NRIs, in aviation companies was restricted to 49%. The above scheme has been made available to all airline companies so the listed names like Spice Jet and Indigo should also benefit substantially.