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Govt open to retaining minority stake in Air India: Sinha

DELHI: The government is open to retaining a minority stake in Air India even as it pursues sale of a strategic holding in the loss-making carrier, Moneycontrol learnt today in an exclusive interview with Jayant Sinha, union minister of state for civil aviation.

The Union Cabinet on Wednesday allowed foreign direct investment of up to 49 per cent in Air India.

This decision means that foreign airlines too can buy a stake in the fully state-owned company under the total FDI limit of 49 percent.

Cabinet allows foreign airlines to buy up to 49% stake in Air India Read here

The foreign investor will need the approval of the government. FDI of up to 49 percent is already allowed in private Indian airline companies under the automatic route.

“So for instance, just to make it perfectly clear. Suppose the government were to disinvest 60 percent of Air India. If we have disinvested 60 per cent of Air India, 60 percent would be with the private sector, 40 percent would remain with the government. OK. Now we have said that no more than 49 percent could be in foreign hands. So 49 percent of the 60 percent, for instance, could be with the foreign player, then 11 per cent could stay with an Indian player and 40 per cent could stay with the government. So the 51 percent would be met,” Sinha told Moneycontrol.

The government has so far not clearly specified how much stake it would sell in Air India other than the fact that it wanted to sell a strategic stake. Whether the government would exit the company or retain a minority share has not been very clear so far. Sinha’s statement indicates the government could look at retaining a minority stake with a majority stake of not more than 49 per cent going to a foreign player.


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