NRIs can own 100% stake in Air India

■ More private players expected to bid for carrier

Opening the doors wider for prospective buyers, the government on Wednesday allowed nonresident Indians (NRIs) to own up to 100 per cent stake in Air India against

49 per cent permitted earlier. The government decision comes at a time when it has sought preliminary bids for 100 per cent stake sale in the national carrier.

The decision was taken in a meeting of the Union cabinet, chaired by Prime Minister Narendra Modi.

“Today’s decision on Air India is one milestone decision where NRIs and they will get permission to invest 100 per cent in the airline,” Union minister Prakash Javadekar told reporters briefing about the cabinet decision.

“Non-resident Indians (NRIs), who are Indian nationals, will get permission to participate in Air India’s strategic sale. Earlier, they were allowed to own up to 49 per cent stake. Now, they can take

100 per cent,” he added. As per the existing norms, 100 per cent foreign direct investment (FDI) is permitted only for the scheduled domestic carriers, subject to conditions, but not in Air India.

The government now plans to divest its entire stake in the national carrier and has set a March 7 deadline for receiving bids. This is the government’s second attempt to privatise the airline, after failing the first one in 2018.

Tata Sons and Adani Group are learnt to be the frontrunners in the race to acquire Air India. With the government’s move, more private players, mostly foreign investors, are expected to participate in the process.

Bengaluru, March Growth in India’s dominant service sector accelerated at a pace not seen in over seven years last month, boosted by a recovery in foreign demand and solid business confidence, a private survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers’ Index climbed to 57.5 in February from January’s 55.5. It was the highest reading since January 2013 and comfortably above the 50mark separating growth from contraction for a fourth month.

“Behind the resilience in the trend for business activity stands healthy demand for services from both the domestic and international markets,” Pollyanna De Lima, principal economist at IHS Markit, said in a release.

“Positive gains in new work across the manufacturing and service sectors suggest that private sector output will likely increase markedly again in March, boding well for final quarter GDP following expectations of a flat growth rate in Q3 FY 2019/20.”

“Service providers experienced a marked improvement in workforce productivity, with the sharp rise in business activity happening,” de Lima said.