The Foreign Investment Promotion Board (FIPB) on Thursday cleared Tata Sons' proposal to launch a full-service airline in partnership with Singapore Airlines (SIA).

Economic Affairs Secretary Arvind Mayaram yesterday announced that the Tata-SIA joint venture proposal had been approved by the FIPB without any conditions.

Confirming the development, a senior official from civil aviation ministry said, "The proposal by Tata-SIA had fulfilled all norms under the existing foreign investment rules and did not face any trouble from any ministry."

The Tata-SIA airline will now have to file an application with the civil aviation ministry for a no-objection certificate (NOC), and subsequently to the Directorate General of Civil Aviation (DGCA) for Air Operators Permit.

The corporate affairs ministry has already approved the proposal.

Amber Dubey, head of aerospace at global consultancy KPMG, said that Tata-SIA has the potential to become one of the top three carriers in India by the year of 2015.

Tata Sons will own a 51 per cent share in Tata-SIA airline, while SIA will hold the remaining 49 per cent.