Wednesday, December 07, 2016

Norms may be eased to boost aviation FDI

The Centre has proposed to dilute substantial ownership and effective control clause for airlines in the Aircraft Rules, 1937 to give effect to its new Foreign Direct Investment (FDI) policy.

An air operator permit is granted to a company only if it is registered in India, the Chairman and its two-third directors are Indian citizens and the substantial ownership and effective control (SOEC) is vested in Indian nationals, according to the present rules.

However, the government has proposed to dilute these norms by doing away with the SOEC clause and allowing just a third of directors to be Indian citizens against two-thirds prescribed at present. Also, it has proposed that either the Chairman or Managing Director or Chief Executive Officer needs to be an Indian citizen. This means, the Chairman of an airline can be a foreign citizen under the proposed norms.
06/12/16 Somesh Jha/The Hindu
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