New Delhi: The government has clarified that the notification related to foreign direct investment (FDI) in aviation doesn’t impose restriction of management control with Indians in airlines where majority stake is vested with a foreign entity.
However, existing airlines like Vistara, AirAsia India, Jet-Etihad and any future carriers with majority stake held by Indian entities will have to ensure that the substantial ownership and effective control (SOEC) rests with Indian nationals.
The clarification from the civil aviation ministry came after the department of industrial policy and promotion (DIPP) notified the changes in FDI policy in the sector, but maintained that no other changes in conditions had been made.
This meant that despite a foreign entity holding 100% stake in an airline, it would have to ensure that SOEC rested with Indian nationals.
However, speaking to FE, RN Choubey put the record straight, saying: “Foreign airlines will not control domestic airlines in case the majority is owned by domestic player.” He added that in case a foreign entity owns a majority stake in an airline, it will not be required to abide by ownership and control structure that requires it to be vested with Indian citizens.
06/07/16 Sumit Jha/Bilal Abdi/Financial Express
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However, existing airlines like Vistara, AirAsia India, Jet-Etihad and any future carriers with majority stake held by Indian entities will have to ensure that the substantial ownership and effective control (SOEC) rests with Indian nationals.
The clarification from the civil aviation ministry came after the department of industrial policy and promotion (DIPP) notified the changes in FDI policy in the sector, but maintained that no other changes in conditions had been made.
This meant that despite a foreign entity holding 100% stake in an airline, it would have to ensure that SOEC rested with Indian nationals.
However, speaking to FE, RN Choubey put the record straight, saying: “Foreign airlines will not control domestic airlines in case the majority is owned by domestic player.” He added that in case a foreign entity owns a majority stake in an airline, it will not be required to abide by ownership and control structure that requires it to be vested with Indian citizens.
06/07/16 Sumit Jha/Bilal Abdi/Financial Express
