Executive Summary:
This document is a corrigendum to a Reserve Bank of India notification regarding Foreign Exchange Management. It addresses investments in Air Transport Services, specifying investment limits, conditions, and regulatory compliance. The corrigendum clarifies the permissible foreign investment percentages and outlines specific conditions for foreign airlines investing in Indian companies operating air transport services.
Key Points / Main Content:
Air Transport Services Investment:
* Scheduled Air Transport Service-Domestic Scheduled Passenger Airline: 49% under automatic route.
* Regional Air Transport Service: 100% for NRIs.
* Non-Scheduled Air Transport Service: 100% under automatic route.
* Helicopter/Seaplane services (requiring DGCA approval): 100% under automatic route.
Conditions for Foreign Airline Investment:
* Foreign airlines can invest up to 49% in Indian companies operating scheduled and non-scheduled air transport services.
* Investments require Government approval.
* The 49% limit includes Foreign Direct Investment (FDI), Foreign Institutional Investment (FII), and Foreign Portfolio Investment (FPI).
* Investments must comply with SEBI regulations (ICDR, SAST).
Scheduled Operator Permit Requirements:
* A Scheduled Operator's Permit can only be granted to a company that meets specific ownership and control criteria.
Security and Equipment Clearances:
* Foreign nationals associated with Indian air transport services require security clearance.
* Imported technical equipment requires clearance from the Ministry of Civil Aviation.
Additional Notes:
* The FDI limits mentioned do not apply when there is investment by foreign airlines.
* The 100% FDI dispensation for NRIs continues as specified.
* The policy outlined does not apply to Air India Limited.
Impact Analysis:
Foreign Airlines:
* Impact: Can invest in Indian companies operating scheduled and non-scheduled air transport services up to 49%, subject to government approval and SEBI regulations.
* Action Required: Ensure compliance with investment limits, obtain government approvals, and adhere to SEBI regulations.
Indian Companies Operating Air Transport Services:
* Impact: May receive foreign investment from airlines up to the specified limit, which can aid in capital raising and expansion.
* Action Required: Comply with SEBI regulations, ensure foreign personnel obtain security clearances, and secure necessary equipment clearances.
Non-Resident Indians (NRIs):
* Impact: Continue to benefit from the 100% FDI dispensation in Regional Air Transport Services.
* Action Required: Ensure investments are within the specified sector and adhere to regulatory requirements.
Ministry of Civil Aviation:
* Impact: Responsible for granting clearances for technical equipment imported as a result of foreign investment.
* Action Required: Process equipment clearance applications efficiently.
Security Agencies:
* Impact: Responsible for clearing foreign nationals associated with air transport services.
* Action Required: Conduct security vetting of foreign nationals prior to deployment.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the country's monetary policy and foreign exchange.
Foreign Exchange Management Act (FEMA): An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
New Delhi: The capital city of India, where the notification was published.
Air Transport Services: Services related to the transportation of passengers or cargo by air, including scheduled, non-scheduled, helicopter, and seaplane services. Policy document provides guidelines related to investments in these services.
Directorate General of Civil Aviation (DGCA): The regulatory body in India for civil aviation, responsible for safety oversight and regulation of air transport services.
Non-Resident Indian (NRI): A citizen of India who is residing outside India.
Foreign Direct Investment (FDI): An investment made by a firm or individual in one country into business interests located in another country.
Air India Limited: The former flag carrier airline of India, now privatized. Mentioned as an exception to certain policies in the notification.
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EXTRAORDINARY
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PART II—Section 3—Sub-section (i)
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PUBLISHED BY AUTHORITY
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No. 811] NEW DELHI, FRIDAY, NOVEMBER 25, 2016/AGRAHAYANA 4, 1938
भारतीय (cid:7407)रज़व (cid:6981) बक(cid:7289)
(िवदशे ी म(cid:7076)ु ा िवभाग)
(क(cid:7286)(cid:7076)ीय कायाल(cid:6981) य)
शिु (cid:7373)प(cid:7074)
मुंबई, 25 नव(cid:7013) बर, 2016
सा.का.िन. 1089(अ).—िवदेशी मु(cid:7076)ा िवभाग, भारतीय (cid:7407)रज़व(cid:6981) ब(cid:7289)क क(cid:7409) (cid:7408)दनांक 15 फरवरी, 2016 को जारी
अिधसूचना सं. फेमा. 362/2016-आरबी, जो जी.एस.आर. सं. 166(अ) के तहत भारत सरकार के राजप(cid:7074), असाधारण,
भाग- II, खंड 3, उप-खंड (i) म(cid:7286) (cid:7079)कािशत (cid:7263)ई थी (िजसे इसके प(cid:7391)ात गज़ट अिधसूचना कहा गया ह)ै , म(cid:7286) -
2. परै ा(cid:7061)ाफ 2 सी (iv) म,(cid:7286) (cid:7059). सं. 9.3 एव ं 9.3.1 को िन(cid:7388)ानसु ार (cid:7079)ित(cid:7021)थािपत (cid:7408)कया जाएगा, अथा(cid:6981)त:
9.3 हवाई प(cid:7407)रवहन सवे ाए ं
(1)(cid:32) (ए) अनुसूिचत हवाई प(cid:7407)रवहन सेवा/घरेल ूअनुसूिचत हवाई या(cid:7074)ी 49% (cid:7021) वचािलत
सेवा (NRI के िलए
(बी) (cid:6979)े(cid:7074)ीय हवाई प(cid:7407)रवहन सवे ाएं 100%)
(2) गरै -अनुसूिचत हवाई प(cid:7407)रवहन सेवा 100% (cid:7021) वचािलत
(3) हले ीकॉ(cid:7009) टर सेवा/ समु(cid:7076)ी िवमान सेवाएँ िजनके िलए नागर िवमानन 100% (cid:7021) वचािलत
महािनदेशालय (DGCA) का अनुमोदन आव(cid:7019) यक ह।ै
5448 GI/2016 (1)
(cid:32)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
9.3.1 अ(cid:7008)य शत (cid:7288)
ए) हवाई प(cid:7407)रवहन सेवा(cid:7312) म(cid:7286) घरेलू अनुसूिचत या(cid:7074)ी एयरलाइन; गरै -अनुसूिचत हवाई प(cid:7407)रवहन सेवाएं,
हले ीकॉ(cid:7009) टर और समु(cid:7076)ी िवमान सेवाएं शािमल ह।(cid:7289)
(बी) िवदेशी एयरलाइन(cid:7298) को उपयु(cid:6981)(cid:6989) त म(cid:7286) दी गई सीमा(cid:7312) और (cid:7079)वेश माग(cid:7300) के अनुसार काग(cid:7299) एयरलाइन,
हले ीकॉ(cid:7009) टर और समु(cid:7076)ी िवमान को प(cid:7407)रचािलत करन ेवाली कंपनी क(cid:7409) इ(cid:7408)(cid:7332)टी म(cid:7286) भागीदारी करने क(cid:7409) अनुमित ह।ै
(सी) िवदेशी एयरलाइन(cid:7298) को अनुसूिचत और गैर-अनुसूिचत िवमान प(cid:7407)रवहन सेवा(cid:7312) को प(cid:7407)रचािलत करन े वाली
भारतीय कंपिनय(cid:7298) क(cid:7409) पूंजी म(cid:7286) उनक(cid:7409) (cid:7079)द(cid:7275)-पूंजी के 49% क(cid:7409) सीमा तक िनवेश करने क(cid:7409) भी अनुमित ह।ै ऐसे
िनवेश िन(cid:7013) निलिखत शत(cid:7300) के अधीन ह(cid:7298)ग:े
(i) यह सरकारी अनुमोदन माग(cid:6981) के तहत (cid:7408)कया जाएगा।
(ii) 49% क(cid:7409) सीमा म(cid:7286) (cid:7079)(cid:7004)य(cid:6979) िवदेशी िनवेश (FDI) और िवदेशी सं(cid:7021)थागत िनवेश (FII) / िवदेशी पोट(cid:6981)फोिलयो
िनवेश (FPI) िनवेश शािमल ह(cid:7298)गे।
(iii) (cid:7408)कए गए िनवेश के िलए सेबी के सुसंगत िविनयम(cid:7298) जैसे पूंजी को जारी करना और (cid:7079)कटीकरण क(cid:7409) अप(cid:6979)े ा(cid:7312)
संबंधी (ICDR) िविनयम(cid:7298)/ शये र(cid:7298) के पया(cid:6981)(cid:7009) त अज(cid:6981)न और अिध(cid:7061)हण (SAST) संबंधी िविनयम(cid:7298) के साथ-
साथ अन य् लागू िनयम(cid:7298) और िविनयम(cid:7298) का पालन करना आव(cid:7019) यक होगा।
(iv) अनुसूिचत ऑपरेटर परिमट केवल उस कंपनी को (cid:7408)दए जा सकते ह:(cid:7289)
ए)(cid:32) जो पंजीकृत ह ैऔर उसके (cid:7390)वसाय का मु(cid:6990)य (cid:7021)थान भारत म (cid:7286)सीिमत हो;
बी) उसका अ(cid:7007)य(cid:6979) और कम से कम दो ितहाई िनदेशक भारत के नाग(cid:7407)रक ह(cid:7298); और
सी) भारतीय नाग(cid:7407)रक(cid:7298) के पास पया(cid:6981)(cid:7385) (cid:7021)वािम(cid:7004)व और (cid:7079)भावी िनयं(cid:7074)ण हो।
(v) ऐसे िनवेश(cid:7298) के प(cid:7407)रणाम(cid:7021)व (cid:7272)प भारतीय अनुसूिचत और गैर-अनूसूिचत हवाई प(cid:7407)रवहन सेवा(cid:7312) के साथ जुड़ने
वाले सभी िवदेशी नाग(cid:7407)रक(cid:7298) को तैनाती स ेपहले सुर(cid:6979)ा संबंधी ि(cid:6989)लयर(cid:7286)स लेना होगा; और
(vi) ऐसे िनवेश(cid:7298) के प(cid:7407)रणाम(cid:7021) व(cid:7272)प भारत म (cid:7286) आयाितत होने वाल े सभी (cid:7079)कार के तकनीक(cid:7409) उपकरण(cid:7298) के िलए
नाग(cid:7407)रक उ(cid:7355)यन मं(cid:7074)ालय के संबंिधत (cid:7079)ािधका(cid:7407)रय(cid:7298) से अनापि(cid:7275) (cid:7079)माणप(cid:7074) लेना अपेि(cid:6979)त होगा।
(cid:7407)ट(cid:7009)प णी : (i) उपय(cid:6989)ु(cid:6981) त परै ा 9.3(1) और 9.3(2) म (cid:7286) व(cid:7414)णत (cid:7079)(cid:7004)य (cid:6979) िवदेशी िनवशे सीमा/ (cid:7079)वशे माग,(cid:6981) उन ि(cid:7021)थितय(cid:7298)
म (cid:7286)लाग ूह,ै जहा ंिवदेशी एयरलाइन(cid:7298) (cid:7367)ारा कोई भी िनवशे नह(cid:7277) (cid:7408)कया गया हो।
(ii) 100% तक (cid:7079)(cid:7004)य(cid:6979) िवदशे ी िनवेश करन े के संबंध म(cid:7286) अिनवासी भारतीय(cid:7298) (NRI) को (cid:7079)ा(cid:7385) छूट
उपयु(cid:6981)(cid:7334) मद 9.3.1(सी) (ii) म(cid:7286) िविन(cid:7416)द(cid:7397) िनवेश (cid:6979)े(cid:7074)/ दायरे पर भी लाग ूबनी रहगे ी।
(iii) उपयु(cid:6981)(cid:7334) मद 9.3.1(सी) म(cid:7286) उि(cid:7016)लिखत नीित मेसस(cid:6981) एयर इंिडया िलिमटेड पर लागू नह(cid:7277) ह।ै
3. गज़ट अिधसूचना क(cid:7409) अ(cid:7008)य िवषयव(cid:7021)तु अप(cid:7407)रव(cid:7414)तत बनी रहगे ी।
[फा. सं. 1/3/ई एम/2016]
शेखर भटनागर, (cid:7079)भारी मु(cid:6990)य महा(cid:7079)बंधक¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 3
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
CORRIGENDUM
Mumbai, 25th November, 2016
G.S.R. 1089(E).—In the Notification of Reserve Bank of India, Foreign Exchange Department No. FEMA.
362/2016-RB dated February 15, 2016 bearing G.S.R.No. 166(E) and published in the Official Gazette of Government of
India – Extraordinary – Part-II, Section 3, Sub-Section (i) (hereinafter referred as Gazette Notification)
2. In paragraph 2(C) (iv), S. No. 9.3 and 9.3.1 shall be substituted as under:
9.3 Air Transport Services
(1) (a) Scheduled Air Transport Service/Domestic Scheduled Passenger 49% Automatic
Airline (100% for
(b) Regional Air Transport Service NRIs)
(2)(cid:32) Non-Scheduled Air Transport Service 100 % Automatic
(3) Helicopter services/ seaplane services requiring DGCA approval 100% Automatic
9.3.1 Other Conditions
(a) Air Transport Services would include Domestic Scheduled Passenger Airlines; Non-Scheduled Air
Transport Services, helicopter and seaplane services.
(b) Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter
and seaplane services, as per the limits and entry routes mentioned above.
(c) Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-
scheduled air transport services, up to the limit of 49% of their paid-up capital. Such investment would be
subject to the following conditions:
(i)(cid:32) It would be made under the Government approval route.
(ii)(cid:32) The 49% limit will subsume FDI and FII/FPI investment.
(iii)(cid:32)The investments so made would need to comply with the relevant regulations of SEBI, such as the
Issue of Capital and Disclosure Requirements (ICDR) Regulations/ Substantial Acquisition of Shares
and Takeovers (SAST) Regulations, as well as other applicable rules and regulations.
(iv)(cid:32) A Scheduled Operator's Permit can be granted only to a company:
a)(cid:32) (cid:104)(cid:116)(cid:97)(cid:101)(cid:32)(cid:32)(cid:116)(cid:103)(cid:101)(cid:114)(cid:115)(cid:101)(cid:105)(cid:116)(cid:100)(cid:114)(cid:115)(cid:105)(cid:32)(cid:97)(cid:110)(cid:100)(cid:32)(cid:104)(cid:110)(cid:105)(cid:114)(cid:97)(cid:99)(cid:32)(cid:112)(cid:32)(cid:105)(cid:112)(cid:115)(cid:116)(cid:105)(cid:115)(cid:97)(cid:32)(cid:108)(cid:112)(cid:97)(cid:108)(cid:99)(cid:101)(cid:98)(cid:32)(cid:111)(cid:32)(cid:102) (cid:117)(cid:104)(cid:110)(cid:116)(cid:105)(cid:105)(cid:32)(cid:115)(cid:119)(cid:115)(cid:101)(cid:115)(cid:110)(cid:105)(cid:32)(cid:73)(cid:110)(cid:59)(cid:100)(cid:97)(cid:105)
b)(cid:32) (cid:104)(cid:116)(cid:101)(cid:104)(cid:32)(cid:67)(cid:97)(cid:109)(cid:97)(cid:114)(cid:105)(cid:110)(cid:32)(cid:97)(cid:110)(cid:32)(cid:97)(cid:100)(cid:32)(cid:116)(cid:101)(cid:108)(cid:97)(cid:111)(cid:32)(cid:116)(cid:119)(cid:116)(cid:115)(cid:45)(cid:104)(cid:116)(cid:100)(cid:32)(cid:114)(cid:105)(cid:111)(cid:115)(cid:32)(cid:102)(cid:104)(cid:116)(cid:101)(cid:32)(cid:101)(cid:99)(cid:68)(cid:114)(cid:111)(cid:105)(cid:116) (cid:32)(cid:111)(cid:115)(cid:114)(cid:104)(cid:32)(cid:102)(cid:119)(cid:105)(cid:99)(cid:104)(cid:32)(cid:97)(cid:101)(cid:101)(cid:32)(cid:114)(cid:110)(cid:122)(cid:99)(cid:105)(cid:116)(cid:32)(cid:105)(cid:111)(cid:115)(cid:32)(cid:102)(cid:73)(cid:110)(cid:100)(cid:32)(cid:97)(cid:105)(cid:97)(cid:100)(cid:59)(cid:110)
c)(cid:32) (cid:104)(cid:116)(cid:101)(cid:117)(cid:32)(cid:115)(cid:98)(cid:97)(cid:116)(cid:115)(cid:110)(cid:97)(cid:105)(cid:116)(cid:32)(cid:108)(cid:111)(cid:110)(cid:104)(cid:119)(cid:115)(cid:101)(cid:112)(cid:105)(cid:114)(cid:32)(cid:101)(cid:101)(cid:102)(cid:97)(cid:102)(cid:100)(cid:99)(cid:118)(cid:105)(cid:116)(cid:101)(cid:32)(cid:110)(cid:32)(cid:99)(cid:111)(cid:110)(cid:111)(cid:114)(cid:116)(cid:32)(cid:108)(cid:111)(cid:32)(cid:102) (cid:104)(cid:119)(cid:99)(cid:105)(cid:104)(cid:32)(cid:32)(cid:118)(cid:115)(cid:101)(cid:105)(cid:116)(cid:101)(cid:100)(cid:115)(cid:32)(cid:110)(cid:105)(cid:32)(cid:73)(cid:110)(cid:110)(cid:100)(cid:97)(cid:32)(cid:105)(cid:111)(cid:110)(cid:110)(cid:97)(cid:97)(cid:105)(cid:116)(cid:46)(cid:32)(cid:115)(cid:108)
(v) All foreign nationals likely to be associated with Indian scheduled and non-scheduled air transport
services, as a result of such investment shall be cleared from security view point before deployment;
and
(vi) All technical equipment that might be imported into India as a result of such investment shall require
clearance from the relevant authority in the Ministry of Civil Aviation.
Note: (i) The FDI limits/entry routes, mentioned at paragraph 9.3(1) and 9.3(2) above, are applicable in
the situation where there is no investment by foreign airlines.
(ii) The dispensation for NRIs regarding FDI up to 100% will also continue in respect of the investment regime
specified at paragraph 9.3.1(c) (ii) above.
(iii) The policy mentioned at 9.3.1(c) above is not applicable to M/s Air India Limited
3. The other contents of the Gazette Notification shall remain unchanged.
[F. No. 1/3/EM/2016]
SHEKHAR BHATNAGAR, Chief General Manager-in-Charge
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.