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Singapore Airlines has received Indian government approval for foreign direct investment, clearing a significant hurdle in the merger of airline Vistara, its 49%-owned joint venture with Tata Group, into Air India, it said on Friday.

Singapore's flagship carrier announced a plan to merge the decade-old Vistara and Tata-owned Air India in November 2022, in a bid to create a dominant full-service airline in the domestic and international markets.

India is among the world's fastest-growing major aviation markets. Global airlines are expanding flights to the country and Indian airlines last year placed record orders for hundreds of new planes.

Singapore Airlines said it expected the deal, which Indian and Singaporean antitrust regulators have cleared, to be completed by the end of 2024.

That is delayed from the original target of March, and the airline said the companies were in talks about an extension to the agreed stop date of Oct. 31.

Singapore Airlines, which is the only foreign airline with a direct stake in an Indian carrier, will hold a 25.1% stake in the combined Air India group in return for a $250 million investment.

The Singaporean company is due to invest up to S$880 million ($675.42 million) after the merger is completed.

India's Tata took over flag carrier Air India in 2022 and embarked on a multi-million dollar transformation of the former state-run airline.

($1 = 1.3029 Singapore dollars)