AirAsia on Saturday said the proposed guidelines for airlines were "bizarre" and were aimed at targeting new players and protecting the existing carriers.
AirAsia CEO Tony Fernandes told reporters here on Saturday that they will wait for clarity on regulation before unveiling expansion plans for India.
Fernandes was here for the unveiling of the fourth aircraft of AirAsia India, the joint venture airline between Tata Sons and AirAsia Berhad.
He said they would persuade the government to drop the proposed rules that require domestic carriers to accumulate certain points by flying locally before they are allowed to fly international routes.
Terming the rules "bizarre", he said he cannot understand the logic except that the incumbents managed to persuade the government to stop the new airlines.
He said these would block new investments from coming into the aviation sector and mean less connectivity and less jobs for India.
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"We want to have more international connectivity to places like Hyderabad, Bengaluru or Tiruchy. Why do you stop this? I can't see the logic," he said.
Stating that open access, freedom of movement and competition was good for India, he said India was like a continent and its tourism has immense potential which need to be unlocked.
"The government should make ensure ease of doing business. I don't believe these rules will facilitate that. I think (Prime Minister Narendra) Modi has not seen the impact of this on airline investment and jobs," he said.
S. Ramadorai, non-executive chairman for AirAsia India, said the tourism potential can be unlocked by allowing competition.
He cited the example of the information technology industry which created almost 3.3 million jobs, as well as 10 million indirect jobs, and total exports crossed $100 billion.