In a further bid to ensure the success of its upcoming Air India (AI, Delhi International) privatisation, the Indian government has approved a proposal that allows non-resident Indians (NRIs) to own up to 100% of the flag carrier, the Cabinet confirmed in a statement issued on March 4.
Overseas Indians, officially known as non-resident Indians or persons of Indian origin, are people of Indian birth or origin who live outside India. There were around 31 million such individuals in December 2018, according to a 2019 Ministry of External Affairs report.
Unlike with other Indian airlines, the investment limit for NRIs to buy into Air India had been restricted to 49% under the country’s foreign direct investment (FDI) policy. This has now been changed to full ownership.
“The amendment in FDI policy will permit foreign investment in M/s Air India Ltd at par with other scheduled airline operators. [...] The proposed changes in FDI policy will enable foreign investment by NRIs into M/s Air India Ltd. up to 100%,” the statement outlined.
The amendment is “meant to liberalise and simplify the FDI policy to provide ease of doing business in the country, leading to the largest FDI inflows and thereby contributing to growth of investment, income, and employment,” it added.
Last month, the government began the privatisation process by inviting offers from potential investors. To sweeten the deal, it has cut Air India’s debt from about INR563.34 billion rupees (USD7.66 billion) to around INR232.87 billion (USD3.17 billion), according to local media.
