Indians settled abroad can now buy India’s national carrier Air India as the government has allowed NRIs to own up to 100% stake in the airline.
Indians settled abroad can now buy India’s national carrier Air India as the government has allowed NRIs to own up to 100% stake in the airline. As the government desperately looks to offload its stake in the cash-strapped airline, it permitted NRIs to buy a complete stake in the airline as opposed to the earlier 49% limit, Union Minister Prakash Javadekar said on Wednesday. The NRI investment will be treated as domestic investment and will not violate SOEC norms which state that any carrier that operates overseas should be owned by that country’s government or citizens. Earlier, the government had said that it does not want to keep its stake in the national carrier.
However, Foreign Direct Investment (FDI) in an airline still stands at 49% through the government approval route. 100% FDI is allowed only for scheduled domestic carriers, subject to certain conditions, according to existing norms.
Earlier, Tata Group-run Vistara Airlines had also said that it is evaluating bidding in the national carrier. “We are evaluating Air India. Which company would not be interested in evaluating a sovereign airline of the country?” Bhaskar Bhat, chairman, Vistara, said this week, PTI reported. However, Vistara added that it cannot yet confirm if it will participate in the bidding. “Whether we bid or not comes later,” he added. Air India was founded by JRD Tata in the 1930s but the airline was later nationalised. After the government bought a majority stake in the airline, Tata Group re-entered India’s aviation business with Vistara and AirAsia.
The government had earlier released the Preliminary Information Memorandum (PIM) for Air India disinvestment in January 2020. Under the divestment plan, a bidder will have to take over debt worth Rs 23,286 crore; the rest of the dues will be transferred to a Special Purpose Vehicle (SPV). The airline has been bleeding money for some time now.