Saturday, June 16, 2012

FDI status for PIO funds in aviation to continue

The Department of Economic Affairs (DEA) note says unlike NRIs, PIOs are not Indian citizens
The Finance Ministry has decided that investment by a person of Indian origin (PIO) in the aviation
sector will continue to be treated as foreign direct investment (FDI) owing to security reasons.
Unlike non-resident Indians (NRIs) who are allowed to invest 100% in aviation, the PIO can
invest only up to 74%, subject to the FDI ceiling. In a note, the Department of Economic Affairs
(infra and investment division), last month, clarified that NRIs are 'Indian citizens', whereas PIOs are not. The Department of Economic Affairs (DEA) said that this is material because of the Civil Aviation Requirement Rule 1937, which requires Indian citizen holding a majority, in the civil aviation sector, especially for the air transport sector.

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