India approves AirAsia's tie-up with Tata Group

NEW DELHI (Reuters) - AirAsia Bhd's proposal to set up a joint venture for running a passenger airline with the Tata Group has been approved by India's Foreign Investment Promotion Board (FIPB), a government statement said on Tuesday.

Malaysia's AirAsia, the largest budget carrier in Asia, plans to launch a regional airline in India with an initial investment of 800 million rupees to cash in on rising demand for domestic air travel among India's expanding middle class.

AirAsia's proposal was cleared at a meeting on March 6, officials had said.

(Reporting by Manoj Kumar; Editing by Matthias Williams and Subhranshu Sahu)