No foreign owners likely for Air India

The Modi government on Monday indicated that it is unlikely to sell Air India to a foreign carrier in its consolidated Foreign Direct Investment policy.

The commerce ministry in its consolidated FDI policy document has also for the first time included start-ups, which can raise up to 100 per cent of funds from Foreign Venture Capital Investor (FVCI).

“The policy mentioned at para (c) above (foreign carriers allowed to own 49 percent in Indian carriers) is not applicable to M/s Air India Limited,” Center said in its consolidated FDI policy.

Para(c) said that foreign airlines are allowed to invest in the capital of Indian companies, operating scheduled and nonscheduled air transport services, up to the limit of 49 per cent of their paid-up capital.

It said such investment would be subject to conditions like it would be made under the government approval route.

There has been speculation that the Tata Group in partnership with Singapore Airlines — may be interested in acquiring a majority 51 per cent stake in Air India if it is privatised. But, the FDI policy may mean that Tata’s proposal may not go through if it wants to bid for the PSU along with Singapore Airlines.

However, the government could change its policy in future on aviation, said experts.

Union Cabinet in June had given the green signal for disinvestment in national carrier Air India and five of its subsidiaries but left it to the Group of Ministers (GoM) to be headed by Union finance minister Arun Jaitley decide the extent of disinvestment.

Currently, the Union government is the sole owner of the national carrier. GoM will be set up to finalise modalities/details of the disinvestment, including the quantum of stake sale.