The fate of Air India remains a mystery since the time the government announced plans in its divestment in June last year.

The Arun Jaitley (finance minister)-headed committee presiding over Air India’s fate is in the process of finalising conditions for the sale of its stake. The bid documents are expected to be ready by this month end.

Last week, the Indian media reported on a rumoured interest from a foreign player to buy 49 per cent stake in Air India’s airline arm. It is unknown if the said player is an airline operator too.

The development comes in the wake of the Union Cabinet recently updating the foreign direct investment (FDI) policy. It may consequently speed up Air India’s divestment process.

On January 10, the Cabinet revised the FDI policy to allow foreign airlines to invest up to 49 per cent in Air India, under government approval route. Before this, the Cabinet did allow foreign airlines to invest in Indian air transport companies, except that Air India was excluded from this benefit — up until now.

The revised policy in favour of Air India comes with two conditions: the foreign airline’s investment in Air India must not exceed 49 per cent, and “substantial control of its operations must remain in the hands of the Indian company”.

Earlier this week a parliamentary panel on transport, tourism and culture suggested in a report that “Air India should be given a chance for at least five years to revive themselves”. It is hopeful that the new FDI policy will help the airline recover some of its losses.

In the FY18 budget, the government had reserved about ₹1,800 crore as equity infusion in Air India. The budget announcement today should reveal details that would further play a role in shaping Air India’s fate.