Just days ahead of the World Economic Forum in Davos, where Prime Minister Narendra Modi is likely to showcase India’s potential before global chief executive officers and political leaders, the Union Cabinet has relaxed rules for attracting foreign investments across sectors such as aviation, retail, and construction. This is the fourth time in the past three years that the government is tweaking the foreign direct investment (FDI) rulebook.
In a significant step, the Cabinet on Wednesday permitted FDI in state-owned carrier Air India, which is up for disinvestment. Foreign airlines or any other foreign investor can now put in up to 49 per cent in Air India, thereby making it easier for the government to divest its holding in the airline. The government is expected to invite expression of interest for Air India after the Union Budget, though a parliamentary committee has recommended that disinvestment of the airline be put on hold for at least five years.