Civil aviation minister said he was hopeful of foreign direct investment being allowed in the country's airlines.
Minister Ajit Singh told reporters on Wednesday that he had talked to most of the government's political allies about the measure.
Shares in Indian airlines, including SpiceJet , rose early on Wednesday after a newspaper report said the government is preparing measures to potentially allow foreign investment in the sector.
Under the current rules, foreign airlines are barred from buying stakes in domestic carriers, although foreign investors are allowed to hold a cumulative 49 percent.