Air India divestment: DPIIT, Aviation Ministry looking at options to ease FDI norms

PTI New Delhi | Updated on October 28, 2019

The Department for Promotion of Industry and Internal Trade (DPIIT) and the Civil Aviation Ministry are looking at the possibility of relaxing foreign direct investment norms to attract bidders for national carrier Air India, an official said.

The government has been trying to sell debt-ridden Air India for long but could not attract bidders. It has now again decided to call bids for sale next month.

In the aviation sector, 100 per cent FDI is allowed under automatic route for MRO (Maintenance, Repair, Overhaul), ground handling and aircraft purchase.

“But in airline operation, there is an issue of substantial ownership and effective control. So there we are talking to the Civil Aviation Ministry to see whether they are interested in liberalising it,” the official said.

Bidding prospects

“It is felt that if you allow 100 per cent foreign direct investment (FDI), probably it will have a better effect on the Air India bidding prospects,” the official added.

The airline is sitting on a debt pile of around ₹58,000 crore, besides huge accumulated losses running into thousands of crores.

The issue, among others, is expected to figure in a meeting of an inter-ministerial group on Tuesday.

Published on October 28, 2019

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