New Delhi: Qatar Airways said on Wednesday that it will start a fully owned airline in India.

The civil aviation ministry had asked the Qatar government and state-owned Qatar Airways CEO Akbar Al Baker to start an airline in India and participate in the country’s growth story, Mint first reported citing government officials on 24 January.

“Yes we will have a 100% owned domestic carrier in India that will belong to both QR (Qatar Airways) and our state investment arm as India has now allowed foreign investment in domestic carriers within India," Al Baker announced on Wednesday at the ITB Berlin travel show which was telecast live on the airline’s Facebook page. “We will soon be making an application to that effect."

Al Baker was responding to a question whether he will increase stake in IAG further. He said he had no intention to do so “at the moment" but will file an application for an airline in India soon.

Qatar Airways is British Airways-owner IAG’s biggest shareholder. The Doha-based airline also owns stakes in Latam Airlines Group SA, South America’s biggest carrier, and Italy’s second-largest airline, Meridiana Fly SpA.

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Qatar has amassed $335 billion in assets around the globe, making its sovereign wealth fund the 14th largest in the world, according to the Sovereign Wealth Fund Institute, Sovereign Wealth Fund reported..

The Indian aviation ministry welcomed the move. “I did not expect this (so soon)," aviation secretary Rajiv Nayan Choubey said on Wednesday. “We will await for the application and will process it as per government policy." Choubey said as far as the question of Qatar investing with its sovereign fund was concerned it will be examined as per norms.

“We will examine that when we receive that application. Yes up to 49% it is allowed. That (fund investment) is something that we will have to take a look as to what is the interplay between the two and that is the subject matter of approval," he said.

Foreign airlines are allowed to own as much as 49% in Indian carriers, although overall foreign investment can go up to 100%.

Abu Dhabi-based Etihad has bought a 24% stake in Naresh Goyal’s Jet Airways. Singapore Airlines has started Vistara in partnership with Tata Group. AirAsia has started a subsidiary again in partnership with Tata Group.Sovereign wealth fund-backed Istithmar PJSC has held a stake in SpiceJet in the past.

India’s domestic aviation market reached nearly 100 million passengers in 2016 and is set to displace the UK as the third-largest aviation market by 2026. India’s international passenger market is also growing at about 10%.

The Narendra Modi government had overturned an earlier policy of giving out hundreds of seats to foreign airlines to fly into India—especially West Asian airlines—telling them instead to invest.

“That’s what we have suggested to them. Look we have a fantastic market—its 100% FDI. Come fly your planes, there is money here (to be made)," civil aviation secretary Rajiv Nayan Choubey said in an interview in January, confirming the aviation ministry has written to the government of Qatar to start an airline in India.

He said the same message was conveyed to Al Baker when he called upon the ministry for bilateral rights.

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