Indian PM Narendra Modi eased restrictions on foreign direct investment (FDI) across several sectors, including allowing overseas airlines to invest in state carrier Air India Ltd., in a bid to revive growth in Asia’s third largest economy.
Foreign carriers can buy up to 49 percent in the loss-making national airline, the government said in a statement. In a move aimed at further improving ease of doing business, the cabinet also allowed single-brand retailers to start local operations without federal approval and foreigners can own up to 100 percent in real estate brokerages.
Modi is trying to lure foreign capital to revive economic growth that is seen expanding at the slowest pace since he came to power in 2014.
The sale of Air India will be one of the key
reforms in recent years as the airline is struggling with a debt load of $7.6 billion and is surviving on a taxpayer bailout.
“By increasing the limits you are sending out a signal that you are moving in the direction of opening up the Indian economy to foreign investment,” Madan Sabnavis, chief economist at Care Ratings Ltd. said.
After taking power with the biggest mandate in three decades, the Bharatiya Janata Party has wrestled with opposition parties that have blocked a bill to make it easier to acquire land for factories.