Private Indian carrier Jet Airways has confirmed it is in talks about a possible investment by Etihad Airways.

The Indian government last year said it would allow foreign airlines to buy minority stakes of up to 49% in the country’s domestic carriers, part of a series of measures to liberalise the economy and promote foreign investment.

“The discussions [with Etihad] are in progress but no terms have been firmed up at present,” Jet Airways said in a statement to the Bombay Stock Exchange.

Jet Airways already has a codeshare agreement with the Abu Dhabi-based carrier.

The airline has become Etihad’s main focus for potential investment in India after Kingfisher Airlines’ operating licence was suspended following extensive financial problems.

Etihad declined to comment on the report in the Financial Times.

The Middle East carrier already has a number of partnerships by taking minority stakes in carriers such as Air Berlin, Virgin Australia and Aer Lingus.