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Amendments in ‘FDI policy’ on Civil Aviation

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    31st Jul, 2020
  • Government has notified changes in foreign direct investment (FDI) norms on civil aviation, which is also called as Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2020.
  • It will permit non-resident Indian nationals to own 100 per cent stake of Air India.
  • The amendment removes the exception which permitted Overseas Citizens of India 100% FDI in air transport, but not Air India.
  • This category of citizens has been replaced with NRIs, now allowed to commit 100% FDI in air transport, including Air India, through automatic route.
  • Substantial ownership and effective control of Air India Limited shall continue to be vested in Indian Nationals as stipulated in Aircraft Rules, 1937.
  • As per the present FDI Policy, 100 per cent FDI is permitted in scheduled Air Transport Service/Domestic Scheduled Passenger Airline (Automatic up to 49 per cent and Government route beyond 49 per cent).
  • However, for NRIs 100 per cent FDI is permitted under automatic route in Scheduled Air Transport Service/Domestic Scheduled Passenger Airline.
  • As per revised FDI policy companies in any country that shares a border with India will have to approach the government for investing in India and not go via the automatic route.

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