United Arab Emirates flag-carrier Etihad Airways could be lining up a bid for a minority stake in struggling Jet Airways of India, it has been reported locally.

Etihad has pursued a policy of acquisition in 2012, having taken stakes in Air Seychelles, Virgin Australia, Aer Lingus and airberlin. 

Any deal for the Indian carrier, which is deeply in debt, would be the first since the county passed legislation in September allowing foreign airlines to buy stakes in domestic operators.

Foreign airlines are now allowed to take stakes of up to 49 per cent.

Business Standard quotes an Indian government official close to the situation as saying: “The talks are on. This is more or less final. It may take around a month and half.”

The Indian aviation industry is reported to have lost $2 billion in 2012, with Air India and Kingfisher as struggling.