In a significant move, Air India is all set to fly daily direct services between Melbourne and Delhi.

The decision will boost trade and cultural ties between Australia's Victoria state and India.

Premier John Brumby and Industry and Trade Minister Jacinta Allan inked an agreement with Air India to fly daily direct services between Melbourne and Delhi starting Nov 1 this year.

Brumby stated that Air India's decision to make Melbourne the spot for its first direct international flight to Australia was recognition of Victoria being Australia's premier destination for Indian tourists and businesses.

"Air India will also be establishing their regional headquarters in Melbourne. This Air India deal will create up to 78 jobs and see up to 123,000 new tourist and business arrivals from India to Victoria each year," Brumby said.

Brumby said that facts from Tourism Research Australia late last year showed a 17.4% growth in visitors from India to Victoria in the year to March 2010.

Allan said that Air India's arrival in Victoria highlighted the competitive strengths of Melbourne Airport compared to its interstate equivalents.

"The airline is now one of 560 aviation and aerospace companies operating across Victoria, which collectively employ around 22,000 people and combined with the Tourism sector generate approximately $20 billion of economic activity for the state each year." (With Inputs from Agencies)