MUMBAI: India’s central bank has clarified that the 49% foreign investment limit in Indian domestic airlines does not include open market buying by funds and applies only to direct investment, a business daily reported.
After Tuesday’s report, shares of Jet Airways Ltd., Deccan Aviation Ltd. and SpiceJet Ltd rose between 1.5% and 3.5% in the Mumbai market. The Reserve Bank of India’s (RBI) observation came in response to a query from budget airline Spicejet.
The paper quoted the RBI as saying “FII (Foreign Institutional Investment) is not to be taken into account while calculating FDI (Foreign Direct Investment) in a domestic airline company.”
However, investment through depositary receipts, secondary market purchase by overseas Indians and overseas corporate bodies would come under the 49 % sectoral cap, the paper said. REUTERS