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Cabinet permits foreign investment of upto 49% in Air India

ANI  |  New Delhi [India] 

The on Wednesday said foreign airlines would be able to invest up to 49 percent in under approval route.

The Cabinet, headed by Modi noted that applicability of this ruling would be subject to two conditions- foreign investment(s) in including that of foreign Airline(s) shall not exceed 49 percent, either directly or indirectly; and substantial ownership and effective control of shall continue to be vested in Indian

As per the extant policy, foreign airlines are allowed to invest under approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 percent of their paid-up capital. However, this provision was presently not applicable to the carrier, thereby implying that foreign airlines could not invest in Air India.

However, this provision has been eliminated, thereby creating opportunities for foreign airlines to invest up to 49 percent under approval route in Air India, subject to the aforementioned conditions.

On a related note, the carrier has a debt burden of more than Rs 52,000 crore.

The previous UPA had extended a bailout package worth little over Rs 30,000 crore to the national carrier for a ten-year period, starting from 2012.

In November 2017, Air India was slated to receive a loan worth Rs. 1,500 crore from the towards the former's working capital requirements.

Prior to this, reports suggest that the had borrowed around Rs 3,000 crore as short tenure loans from two lenders - the and the

The Air India group flies to 44 overseas and 75 domestic destinations. Flights operate to Copenhagen, Tokyo, Washington, Stockholm, Sydney, Hong Kong, Kabul, Colombo, Seoul, and London, among other foreign cities.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 10 2018. 14:15 IST