The Ministry of Finance (MoF) has, by way of notification dated 27 July 2020 (Notification), notified amendments in the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (Non-debt Rules). As per the Notification:
(a) Non-debt Rules shall be administered by the Reserve Bank of India (RBI);
(b) RBI may interpret and issue necessary directions, circulars, instructions, or clarifications, for effective implementation of the Non- debt Rules; and
(c) Non-residents Indians (being Indian Nationals) can now acquire upto 100% ownership in Air India Limited (AIL).
Earlier, in order to encourage the non-resident Indians to invest in civil aviation sector and to attract more bidders for AIL, the Department for Promotion of Industrial Policy and Internal Trade had, vide Press Note 2 of 2020 dated 19 March 2020 (PN2), amended the foreign direct policy (FDI) policy to, inter alia, permit FDI by non-residents Indians (being Indian Nationals) in AIL upto 100% under automatic route.
The Notification has now amended the FDI norms for civil aviation sector to give effect to the provisions of PN 2.