In an interview to Swarajya magazine, Modi said that the government's efforts to privatise the national carrier had faltered owing to the lack of response to the first sale offer.
"For Air India, the government has done what it had to with utmost sincerity. You have to differentiate between the lack of response to one sale offer and a policy decision.
At the cabinet level, we have cleared the sale of not only Air India but several other (loss making) public sector units - this itself is historical in many ways," he said.
"That they are yet to be sold is the result of timing and process. We don't want to make a sale where we will be accused of selling something for X amount when we could have got more. But the policy decisions for strategic sales have already been taken," he added.
Last month, the government said that a 76 per cent stake sale process of Air India has ended as "no interest" was shown by bidders, but it remains committed to the strategic divestment for which other alternatives will be evaluated.
"We ran a disinvestment process, where we made it very clear what type of bids we were interested in receiving... We asked certain type of bidders with certain bidding criteria to participate," Minister of State for Civil Aviation Jayant Sinha told reporters here.