However, Ajit Singh said he does not see any other major hurdles for the venture in India.
The Foreign Investment Promotion Board(FIPB) is scheduled to meet later on Wednesday to consider the proposal, he said.
Malaysia's AirAsia, the largest budget carrier in Asia, plans to launch a regional airline in India in a venture with the Tata group. The new airline, AirAsia India, will be managed by the Malaysian company and based in the southern city of Chennai.
Earlier reports said that the Aviation Ministry is understood to have opposed the plan saying the new FDI rules are meant for existing carriers only.
The Foreign Investment Promotion Board (FIPB) is slated to take up Air Asia's JV proposal with the Tatas and Arun Bhatia. The Ministry is understood to have expressed its reservations in a note to FIPB stating that the new company should have been formed before seeking the government's nod.
The ministry's opposition comes amid reports in a section of the media that AirAsia Group CEO Tony Fernandes was keen to kick off his airline in the country as early as May-June instead of his earlier plans towards the year-end.
It can be noted that a day after the AirAsia announced its 49:30:21 joint venture with the Tatas and Telestra Tradeplace promoted by Delhi-based Arun Bhatia late last month, Aviation Minister Ajit Singh had expressed his displeasure saying he would have been happy had the Tatas chosen to launch its own airline.
Over the weekend, Tata Group patriarch Ratan Tata, who is an avowed aviation buff and whose group is credited with bringing the first airline into the country way back in October 1938, met Singh, for reportedly discussing the JV plan.
In a related development earlier in the day, Fernandes said he had chosen the head for the JV.
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