Monday, August 28, 2017

Air India unlikely to be sold to foreign airlines under new consolidated FDI policy

New Delhi: Air India is unlikely to be sold to foreign carriers as the government seeks a buyer for the Maharaja. The consolidated foreign direct investment (FDI) policy released on Monday says that while foreign carriers can own up to 49% stake in Indian carriers, this is "not applicable" to AI.
Apart from AI, foreign investors or airlines will be allowed to run an airline in India only if the substantial ownership and effective control (SOEC) is with Indians. This clause could put a roadblock in Qatar Airways' plans to launch an airline in India.
Last June, the government had allowed Indian carriers to be fully owned by foreign entities. While foreign carriers still can have up to 49% stake in airlines here, they could get a foreign partner — like a sovereign wealth fund or an institutional investor — and not look for an Indian partner to put in the remaining 51%.
But the consolidated FDI policy issued on Monday by the department of industrial policy and promotion says "a scheduled operator's permit can be granted only to a company... the chairman and at least two-thirds of the directors of which are citizens of India; and the substantial ownership and effective control of which is vested in Indian nationals."
28/08/17 Saurabh Sinha/Times of India