Amendments in ‘FDI policy’ on Civil Aviation

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.