Govt mulls easing foreign control rule to aid Air India sale

India is considering amending a rule to allow overseas control of local airlines, according to a person familiar with the matter, which may help its indebted national carrier lure a foreign suitor after multiple failed attempts for a sale.

At a meeting in early November, the Department for Promotion of Industry and Internal Trade asked the aviation ministry if it would be feasible to change the so-called substantial ownership and effective control clause, the person said, asking not to be identified as the details aren’t public.

The rule mandates that control of an airline always remains in Indian hands, one of several reasons global firms have been wary of bidding for Air India Ltd. Doing away with the substantial ownership clause will enable an overseas stakeholder weigh in on major decisions of local airlines.