Competition Commission of India on Tuesday approved Jet Airways (India) Ltd. and Abu Dhabi-based Etihad Airways deal of Rs 2,058 crore.
According to the deal Jet will sell a 24% stake to Etihad Airways.
This will be the first investment by a foreign airline in an Indian carrier.
India cabinet of ministers approved the deal on Oct. 3.
The deal has already been appeared by SEBI, Foreign Investment Promotion Board (FIPB) and Cabinet Committee of Economic Affairs (CCEA).
CCI was concerned on whether this deal would result in Etihad might get control of Jet with its 24% stake. It was also concerned the impact of this deal on other airlines operating in India.
CCI said, "The Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India".
Jet Airways is led by Naresh Goyal who would eventually have a 51 percent stake in the company.
Jet Airways said that with this deal company can reduce debt and cut costs by allowing joint purchasing of jet fuel, aircraft orders, training of crew and aircraft maintenance.
In September 2012, India allowed foreign carriers to own as much as 49% of Indian carriers.
After the completion of the deal Etihad would own 24 percent and the public remaining 25 percent.