Foreign carriers are to be allowed to invest in Air India.

The Indian government yesterday agreed that overseas airlines could take a stake of up to 49% when the state carrier is privatised as part of a long-running sell-off plan.

The flag carrier has made losses for almost all of the past decade and received a $6.6 billion government bailout in 2012.

Indian government officials are hoping several foreign companies might enter the bidding for the company, but so far only Singapore Airlines has indicated possible interest, the Financial Times reported.

Leslie Thng, chief executive of Vistara – an Indian joint venture between Tata and SIA – last week said the two companies were open to making an offer.

Air India is seen to be attractive as it would provide access to the vast Indian travel market and large parts of its debts are likely to be written off by the government.