The Indian government is set to consider a proposal to allow foreign airlines pick up to 49 per cent equity in Indian carriers. The government now allows 49 per cent foreign direct investment (FDI) in domestic carriers but bars foreign airlines from holding any stake directly or indirectly.

Initially, the civil aviation ministry had recommended that foreign airlines be allowed to take up to 25 per cent in domestic airlines, because any stake above 26 per cent would give foreign airlines a say in the management of the company, according to the Indian Express.

Most domestic airlines are in the red as a result of rapid growth in the domestic market combined with negative traffic growth and declining premium and business travel as a result of the global recession.