AirAsia India, a budget airline set up by one of Asia's biggest low-cost carriers AirAsia and India's Tata Group, has won approval for operations.

It will be the first airline with foreign investment to operate in India.

India opened up its aviation market to foreign investment in 2012 in an attempt to boost growth in the sector and the overall economy.

Indian airlines have been mired in losses because of rising fuel costs as well as intense price competition.

Only one of India's six main carriers - IndiGo - has been making profits.

(BBC)