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Govt retains clause that keeps Air India out from being sold to foreign airline

LiveMint logoLiveMint 28-08-2017 Tarun Shukla

New Delhi: The government has retained a clause that kept Air India Ltd out from being sold to a foreign airline under its foreign direct investment (FDI) policy.

In the consolidated FDI policy released on Monday, it said the rule allowing foreign carriers to own up to 49% of Indian airlines does not apply to Air India.

In June last year, the government decided to allow 100% investment by foreign entities (not airlines) into the aviation sector to own and operate airlines. Investment by foreign airlines in Indian ones remained capped at 49%.

Etihad Airways PJSC owns a stake in Jet Airways (India) Ltd. Singapore Airlines Ltd has invested in Vistara, a joint venture with Tata Sons Ltd, and AirAsia Bhd. in AirAsia India, in which Tata Sons is again the local partner.

In June, the government said it intended to privatise Air India. InterGlobe Aviation Ltd, which runs IndiGo, has already thrown its hat in the ring. Mint reported on 23 July that private equity funds KKR and Co. and Warburg Pincus were also considering doing so.

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