New Delhi: AirAsia Bhd's planned joint venture in India could face some procedural problems, India's aviation minister said on Wednesday, without elaborating.
               
However, Ajit Singh said he does not see any other major hurdles for the venture in India. India's Foreign Investment Promotion Board is scheduled to meet later on Wednesday to consider the proposal, he said.
               
Malaysia's AirAsia, the largest budget carrier in Asia, plans to launch a regional airline in India in a venture with the Tata group. The new airline, AirAsia India, will be managed by the Malaysian company and based in the southern city of Chennai.

AirAsia is looking to start flying from this year-end with 3-4 planes and an initial investment of about USD 50 million by the Malaysian budget carrier.
    
The proposed joint venture will operate from Chennai and will focus on providing domestic connectivity to Tier-II and Tier-III cities.
    
As per current rules, a carrier must complete five years of domestic operations before becoming eligible for starting overseas flights.
    
Tata Sons, the holding company of the USD 100 billion salt-to-software conglomerate, will hold 30 percent in the joint venture but will not have any operating role in the airline.
    
This will mark the return of Tatas to aviation sector. State-owned Air India had grown out of Tata Airlines, which began flights in 1932.
    
AirAsia, through its operations based in Thailand and Malaysia, flies to Chennai, Bangalore, Kochi, Tiruchirappalli and Kolkata in addition to 20 countries.
    
AirAsia, Tatas and Hindustan Aviation of Bhatias have signed a partnership agreement for the venture.
    
Air Asia has made the move to invest even as Etihad and Jet Airways continue to work towards finalising a deal for the Gulf carrier to invest in Jet.

(Agencies)

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