Cabinet approves 49% foreign investment in Air India under approval route

The Union Cabinet today approved changes in Foreign Direct Investment (FDI) norms to allow foreign carriers to own 49 per cent in Air India under approval route, a change that will allow foreign carriers to bid for the national carrier but with an Indian partner.

The earlier FDI policy allowed foreign carriers to own 49 per cent in Indian carriers but, had kept Air India out of it, which has been amended by the Cabinet now.

“Foreign investment(s) in Air India including that of foreign Airline(s) shall not exceed 49 per cent either directly or indirectly. Substantial ownership and effective control of Air India shall continue to be vested in Indian National,” government said in a release.

The substantial ownership and effective control (SOEC) clause will still be applicable on the national carrier, which means the new promoters of Air India will have to keep its chairman as Indian and cannot shift its operational headquarters to anywhere out of India.

Apart from aviation sector, cabinet also approved 100 per cent FDI in single-brand retail via automatic route. Currently, FDI, up to 49 per cent is allowed under automatic route but any investment beyond the limit require government approval.