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FDI rules relaxed, debt-ridden Air India opened for foreign investment

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9 years ago

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Modi govt relaxes FDI rules, will allow foreign airlines to invest in Air India

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Narendra Modi Cabinet approves slew of changes in FDI rules, 100 per cent FDI through automatic route in single brand retail allowed

Over three years after it took a strong position against the then Dr Manmohan Singh-led UPA government’s decision for allowing foreign direct investment in various sectors, including single and multi-brand retail, the BJP under Prime Minister Narendra Modi appears to be going all out to promote foreign investment in various sectors of India’s stagnating economy.

On Tuesday, a meeting of the Union Cabinet chaired by the Prime Minister decided to substantially relax rules for FDI in a host of sectors, including single brand retail trading (SBRT), construction and civil aviation. The Cabinet has approved amendments to the Centre’s FDI policy in the civil aviation sector, paving the way for a liquidity infusion in the cash-strapped national carrier – Air India – which was hitherto excluded from the list of India’s airline operators in which FDI was allowed.

“As per the extant policy, foreign airlines are allowed to invest under Government approval route in the capital of Indian companies operating scheduled and non-scheduled air transport services, up to the limit of 49 per cent of their paid-up capital. However, this provision was presently not applicable to Air India, thereby implying that foreign airlines could not invest in Air India. It has now been decided to do away with this restriction and allow foreign airlines to invest up to 49 per cent under approval route in Air India,” an official statement from the government said after the Cabinet meeting.

The Cabinet has decided that FDI in the debt-ridden Air India will be permitted on the condition that it does not exceed 49 per cent either directly or indirectly and that “substantial ownership and effective control of Air India shall continue to be vested in Indian National.”

The Centre has sought to justify its move claiming that the relaxation of FDI norms would help provide ease of doing business and lead to larger foreign investment inflows.

The Prime Minister and his cabinet seem to have realised that FDI is a major driver of economic growth and a source of non-debt finance for the economic development of the country. It is pertinent to recall that while the BJP was in Opposition and Modi was chief minister of Gujarat, he along with Arun Jaitley and Sushma Swaraj – then Leaders of Opposition in the Rajya Sabha and Lok Sabha respectively – had led the saffron party’s charge against the UPA government’s FDI policy.

Now, at a time when the country’s GDP seems to be on a steady decline amid projections of continuing stagnation in the domestic economy owing to disruptions caused by the Goods and Services Tax (GST) rollout, the Modi government is going all out to embrace a tool on boosting investment inflows that it had once vociferously decried for being against the interests of India.

Besides opening up Air India for FDI, the other key decision taken at Tuesday’s Cabinet meet was the red-carpet rollout for foreign investment in single brand retail trading.

“Extant FDI policy on SBRT allows 49 per cent FDI under automatic route, and FDI beyond 49 per cent and up to 100 per cent through Government approval route. It has now been decided to permit 100 per cent FDI under automatic route for SBRT,” the official statement said.

“It has been decided to permit single brand retail trading entity to set off its incremental sourcing of goods from India for global operations during initial 5 years, beginning 1st April of the year of the opening of first store against the mandatory sourcing requirement of 30 per cent of purchases from India. For this purpose, incremental sourcing will mean the increase in terms of value of such global sourcing from India for that single brand in a particular financial year over the preceding financial year, by the non-resident entities undertaking single brand retail trading entity, either directly or through their group companies. After completion of this 5 year period, the SBRT entity shall be required to meet the 30 per cent sourcing norms directly towards its India’s operation, on an annual basis,” the government said.

On FDI in the construction sector, the government said: “It has been decided to clarify that real-estate broking service does not amount to real estate business and is therefore, eligible for 100 per cent FDI under automatic route.”

The cabinet also decided to allow FIIs/FPIs to invest in power exchanges through primary market as well. So far 49 per cent FDI was permitted under automatic route in power exchanges registered under the Central Electricity Regulatory Commission (Power Market) Regulations, 2010 but FII/FPI purchases were restricted to secondary market only.

The Centre has also decided to relax the rules followed for approval of FDI proposals that are moved in the automatic route sectors.

As per the existing procedures, FDI applications involving investments from Countries of Concern, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines are to be processed by the Union home ministry for investments falling under automatic route sectors. Cases pertaining to government approval route sectors requiring security clearance are processed by the respective administrative ministries.

“It has now been decided that for investments in automatic route sectors, requiring approval only on the matter of investment being from country of concern, FDI applications would be processed by Department of Industrial Policy & Promotion (DIPP) for Government approval,” the Cabinet press note said.

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PM Modi takes aim at critics with Dimagi Naxal remark at SRCC centenary address

PM Modi revived his dimagi Naxal remark at SRCC’s centenary celebrations and spoke about India’s development journey.

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10 mins ago

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September 6, 2026

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PM Modi

Prime Minister Narendra Modi revived his ‘dimagi Naxal’ remark while addressing the centenary celebrations of Shri Ram College of Commerce (SRCC) in Delhi on Saturday, using the term to criticise his opponents.

Speaking to students at the Delhi college, PM Modi described the phrase as a “homeopathic pill” and said it had prompted those he described as “dimagi Naxals” to come forward and reveal their views.

The prime minister also used his address to speak to Gen-Z about India’s development journey and asked students to consider the challenges the country had faced in the past.

PM Modi recalls past crises

During his speech, PM Modi referred to the 2013 Kedarnath disaster and the 2008 global financial crisis while criticising the handling of national emergencies by previous governments.

He said the government at the time of the Kedarnath disaster was shaken and questioned its ability to respond to the crisis.

Referring to the 2008 banking crisis, PM Modi alleged that the government of the time failed to effectively deal with the situation and claimed that India’s banking system was pushed close to collapse.

Prime minister lists challenges faced by his government

PM Modi also highlighted several major global crises that occurred during his government’s tenure.

He mentioned the COVID-19 pandemic, the Russia-Ukraine war, disruptions to global trade and supply chains, and the crisis in West Asia.

The prime minister said there had been concerns that India would struggle during these crises but argued that the country had continued to move forward.

PM Modi’s earlier SRCC visit

PM Modi had earlier visited SRCC in 2013, when he was the chief minister of Gujarat. His speech at the college received significant attention, particularly on social media, ahead of the 2014 Lok Sabha election.

His latest visit came during the college’s centenary celebrations, where his address focused on young people, India’s development ambitions and the challenges faced by the country.

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India Metro Rail Network May Overtake US in 2 Years

India’s metro rail network has reached 1,170 km across 26 cities. Union minister Manohar Lal said the country could overtake the US in network length within two years.

Published

14 hours ago

on

September 5, 2026

By

Manohar Lal Khattar

India is on track to become the country with the second-largest metro rail network in the world after China, with Union Minister Manohar Lal saying the country could overtake the United States within the next two years.

India’s metro rail network has now expanded to 1,170 km across 26 cities. The network is only 216 km shorter than the US metro rail network, which stands at 1,386 km, according to figures cited by the minister.

India’s metro network expands rapidly

Speaking after the inauguration of an extended metro service in Indore, Manohar Lal highlighted the pace at which metro connectivity has grown in India.

He said metro services were operational across just 245 km in five cities when Prime Minister Narendra Modi assumed office in 2014. The network has since expanded to 1,170 km across 26 cities.

The minister said India could overtake the US in terms of metro rail network length in the next two years and become the world’s second-largest country in this segment after China.

China currently has around 8,000 km of metro rail lines, according to the figures cited by the minister.

Indore metro extension inaugurated

The minister made the remarks after inaugurating an extended section of the Indore metro. The project was built at a cost of around Rs 2,850 crore.

The Indore metro was earlier operating commercially on a six-km stretch between Gandhi Nagar and Super Corridor-3 stations. Following the extension, the service will operate on a 17-km route between Gandhi Nagar and Malviya Nagar Chauraha.

Madhya Pradesh Chief Minister Mohan Yadav said the metro service would mark a new phase in Indore’s development. He also said the network would eventually be extended to Ujjain and other nearby areas.

India’s metro rail network: Key figures

  • India currently has 1,170 km of operational metro rail network.
  • Metro services are operational across 26 cities.
  • The US has around 1,386 km of metro rail network.
  • India is currently 216 km behind the US.
  • China has around 8,000 km of metro rail lines.
  • India’s operational network stood at 245 km across five cities in 2014.

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PM Modi returns to SRCC after 13 years, revisits 2013 glass full speech

PM Narendra Modi returned to SRCC after 13 years for its centenary celebrations, revisiting themes from his landmark 2013 address.

Published

15 hours ago

on

September 5, 2026

By

PM Narendra Modi

Prime Minister Narendra Modi returned to Delhi University’s Shri Ram College of Commerce (SRCC) on Saturday, 13 years after his previous visit to the institution as Gujarat chief minister. 

His latest visit came as SRCC marked its centenary celebrations. Modi’s 2013 address at the college had attracted significant attention as he spoke about India’s youth, governance and the country’s demographic potential.

In 2013, Modi was Gujarat chief minister and had not yet been named the BJP’s prime ministerial candidate. He returned to the same campus this year as Prime Minister, having completed 12 years as Prime Minister and serving his third consecutive term. 

What PM Modi said at SRCC in 2013

The 2013 lecture was titled Emerging Business Models in the Global Scenario. The address also covered governance and India’s young population.

He described India’s youth as a source of national strength rather than simply a group of new-age voters. He also highlighted India’s demographic advantage and argued that the country needed to make better use of its young population.

One of the notable moments from the speech involved a glass of water.  Modi contrasted the conventional descriptions of a glass as half full or half empty and said he viewed it as full, with half containing water and the other half air.

The speech also included his remarks on technology and young Indians. Referring to an anecdote from a visit to Taiwan, Modi used the phrase “mouse-charmers” to describe Indians using computers and suggested that young Indians had the ability to influence the world through technology.

‘Minimum government, maximum governance’

Modi’s 2013 address also touched on governance. He spoke about the role of government and the need for better governance.

He also spoke about India’s potential in the 21st century. 

Modi returns as PM for SRCC centenary

The September 5 visit coincided with Teachers’ Day and SRCC’s 100th anniversary. The Prime Minister’s Office had announced that Modi would participate in the college’s centenary celebrations and address the gathering. SRCC was established in 1926 by industrialist and philanthropist Sir Shri Ram.

Earlier this year, Modi also met the SRCC governing body at his residence in April in connection with the college’s centenary celebrations and released a commemorative postage stamp marking the occasion. 

The return to SRCC came 13 years after his 2013 appearance at the college, when he addressed students as Gujarat chief minister.

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