Private parties with direct or indirect participation in a foreign or Indian carrier could not invest in an Indian airline, Patel said on the sidelines of a meeting of the Cooperative Development of Operation Safety and Continuing Airworthiness.

"Our policy is very clear on not allowing parties with even an indirect link with any airline to invest," the minister said, pointing out that Branson was the chairman of Virgin Atlantic in his personal capacity.

"So it is up to you to interpret," remarked Patel, strongly hinting that Branson as an individual could also be ruled out as a potential investor.

When questions persisted on the issue, especially two days after Civil Aviation Secretary Ajay Prasad had appeared amenable to an application by Branson in his individual capacity, Patel said: "Let him apply first. The government is competent to take a decision."

Foreign individuals and financial institutions, but not foreign airlines, can buy up to a 49 percent stake in Indian carriers.
 
Branson had announced Saturday he was looking to buy a 25 to 49 percent stake in an Indian airline and was talking to two existing Indian carriers to buy stakes and two others that were poised to launch services shortly. He did not say when an agreement might be reached.

He said the investment would be made by him personally to get around Indian regulations that prevent foreign carriers from buying stakes in local airline firms.

Branson's Virgin business empire stretches from planes and trains to vodka, music, personal finance and telephones.

--Indo-Asian News Service