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A bird flies by the Vedanta office building in Mumbai

Regulatory hurdles could delay Vedanta Resources' purchase of a stake of up to $9.6 billion in Cairn India, but the buyer and analysts see them as unlikely to derail the deal.

Vedanta, in its first move into the energy sector, is buying a controlling stake in India's 4th largest oil and gas company from Britain's Cairn Energy to capitalise on rising energy demand, economic growth and an expanding population.

The deal will need the Indian government's approval because Cairn India has production-sharing contracts (PSCs) with the government for its oil and gas exploration blocks. According to their agreement, any change of ownership would require the government approval.

Approval from state-run explorer ONGC, which has a 30 per cent stake in Cairn India's Rajasthan oil block called RJ-ON-90/1, is also crucial for any change of ownership at British firm's Indian unit.

ONGC has not yet raised concerns on the Cairn India-Vedanta deal, Indian Oil Secretary S Sundareshan said on Tuesday, adding the government would take into account ONGC's views on the deal.

Cairn Energy Chairman Bill Gammell arrived in New Delhi late Monday to speak with government officials in hopes of ironing out the approval process for the acquisition.

(Pictures by Reuters)