India's ministry of finance has given formal approval for AirAsia to set up a joint venture carrier in the country.
In a press statement issued on 25 March, the ministry says it has approved AirAsia's application to invest Indian rupees (Rs) 809.8 million ($14.9 million) to set up a joint venture carrier for scheduled passenger services.
Flightglobal Pro had earlier reported that the carrier's application was considered and approved at a Foreign Investment Promotion Board meeting on 6 March.
AirAsia announced plans in February to jointly set up a carrier with local partners, conglomerate Tata Sons and entrepreneur Arun Bhatia's Telestra Tradeplace.
Local media reports say AirAsia will own 49% of the new carrier while Tata will hold 30% and Telestra the remaining 21% stake.
The new carrier will commence operations from Chennai and focus first on linking the destination to other cities in southern India, before expanding across the country as its grows its fleet.
With the ministry's approval, AirAsia will need to apply for an air operator's permit ahead of its planned service launch in the fourth quarter of the year.