It would also be “examining” the substantial ownership and effective control (SOEC) norms of the various countries which permit more than 49 per cent foreign direct investment (FDI) in their airlines, Civil Aviation Secretary R N Choubey told reporters on the sidelines of an aviation event here. Under the current norms, AOP or flying licence is granted to a company only if its chairman and two-third Directors are Indian citizens and its substantial ownership and effective control is vested in Indian nationals.
“The policy relating to AOP being given, that policy will be completely aligned with the FDI Policy. So if there is something when higher FDI investment is not resulting in AOP being given, then the AOP requirement will be to that extent will be amended,” Choubey said. Foreign investors, barring overseas airlines, are now allowed to have up to 100 per cent stake in local carriers under the recently liberalised FDI norms.
Under the new set-up, 49 per cent FDI will be through the automatic route and for anything beyond, government nod will be required. At present, up to 49 per cent FDI is permitted in scheduled airlines. However, foreign airlines, under the norms, canot invest more than 49 per cent in the domestic carriers. The requirement of SOEC comes up at two places-- for grant of AOP to an Indian citizen and at the place where India has to grant bilateral rights, he said.