Published: Sat, January 13, 2018
Finance | By Loren Pratt

Govt clears 49% FDI in Air India

Govt clears 49% FDI in Air India

As the real estate business has been crippled, allowing 100% FDI under the automatic route for real estate broking services can help matters. The development is expected to clear the way for foreign airlines and Indian carriers to get into tie-ups to jointly invest in Air India.

Swadeshi Jagran Manch has said that easing the norms for FDI in SBRT would go against the best interest of the country.

While there have been efforts by previous governments to divest part of all of the state's stake in Air India, none has shown as much commitment and intensity as the current National Democratic Alliance. And to expedite such privatisation move, the government has now made this announcement of permitting 49 per cent FDI. Commenting on this strategic move by the government, commerce minister Suresh Prabhu said that this Liberalization move was to gather more investments, and develop the economy of India. It is therefore, eligible for 100 per cent FDI under the automatic route.

Among the "disastrous decisions", Sen listed the "hasty merger" of Indian Airlines and Air India and "forcible procurement" of a huge fleet of aircraft from foreign companies through direct purchase at an inopportune time thereby imposing on the company an "unbearable burden of indebtedness leading to loss".

In a major move to attract more FDI into the country, the government on Wednesday permitted foreign airlines to invest up to 49 per cent in disinvestment-bound Air India and liberalised rules for foreign investment in single brand retail, construction and power exchanges.

"Global brands across different categories, from apparel to electronics to accessories will be aided through this, providing further options to Indian consumers and improving India?s ranking in ease of doing business", he added.

The Union Cabinet has given its approval to a number of amendments in the FDI Policy.

The government also said that issue of shares against non-cash considerations like pre-incorporation expenses and import of machinery will now be permitted under the automatic route in case sectors do not require government nod.

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