Majority FDI in scheduled and regional air transport service is subject to government approval, and FDI in domestic scheduled air transport services is limited to 49%. Foreign investment in Indian companies, operating both scheduled and non-scheduled air transport services, is also up to the limit of 49% of their paid-up capital, whereas no foreign shareholding limit applies to investment in companies providing only non-scheduled air transport services. Lastly, FDI in AIr India is also limited to 49%.
"CHAPTER 3: GENERAL CONDITIONS ON FDI [...]
3.4   ENTRY ROUTES FOR INVESTMENT 3.4.1 Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route. Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Under the Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government Route, are considered by respective Administrative Ministry/Department. 
[...]
3.5   CAPS ON INVESTMENTS
3.5.1 Investments can be made by person resident outside India in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of this Circular. 
3.6   ENTRY CONDITIONS ON INVESTMENT
3.6.1 Investments by non-residents can be permitted in the capital of a resident entity in certain sectors/activity with entry conditions. Such conditions may include norms for minimum capitalization, lock-in period, etc. The entry conditions in various sectors/activities are detailed in Chapter 5 of this Circular.
[...]
5.2 PERMITTED SECTORS
a) In the following sectors/activities, FDI up to the limit indicated against each sector/activity is allowed, subject to applicable laws/regulations; security and other conditionalities. In sectors/activities not listed below, FDI is permitted up to100% on the automatic route, subject to applicable laws/regulations; security and other conditionalities. [...]
c) Foreign investment in sectors under Government approval route resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to nonresident entities will be subject to Government approval. Foreign investment in sectors under automatic route but with conditionalities, resulting in transfer of ownership and/or control of Indian entities from resident Indian citizens to non-resident entities, will be subject to compliance of such conditionalities. 
[...]
5.2.9 CIVIL AVIATION
5.2.9.1 AIRPORTS 
Sector/Activity | % of Equity/FDI Cap | Entry Route
(a) Greenfield projects  | % of Equity/FDI Cap: 100% | Entry Route: Automatic  
(b)  Existing projects  | % of Equity/FDI Cap: 100% | Entry Route: Automatic  
5.2.9.2 AIR TRANSPORT SERVICES
(1) (a) Scheduled Air Transport Service*/ Domestic Scheduled Passenger Airline
(b) Regional Air Transport Service  | % of Equity/FDI Cap: 100% | Entry Route:  Automatic up to 49% (Automatic up to 100% for NRIs) & Government route beyond 49%
(2) Non-Scheduled Air Transport Services | % of Equity/FDI Cap: 100% | Entry Route: Automatic  
(3) Helicopter services/seaplane services requiring DGCA approval | % of Equity/FDI Cap: 100% | Entry Route: Automatic  
[*As per Schedule XI of Aircraft Rules, 1937, Air Operator Certificate to operate Scheduled air transport services (including Domestic Scheduled Passenger Airline or Regional Air Transport Service) may be granted to a company or a body corporate provided that: - (a) it is registered and has its principal place of business within India;  (b) the Chairman and at least two-thirds of its Directors are citizens of India; and (c) its substantial ownership and effective control is vested in Indian nationals]
5.2.9.3 OTHER SERVICES UNDER CIVIL AVIATION SECTOR 
(1) Ground Handling Services subject to sectoral regulations and security clearance | % of Equity/FDI Cap: 100% | Entry Route: Automatic  
(2) Maintenance and Repair organizations; flying training institutes; and technical training institutions. | % of Equity/FDI Cap: 100% | Entry Route: Automatic 
[...]
OTHER CONDITIONS
(a)  Air Transport Services would include Domestic Scheduled Passenger Airlines; NonScheduled Air Transport Services, helicopter and seaplane services.
(b)  Foreign airlines are allowed to participate in the equity of companies operating Cargo airlines, helicopter and seaplane services, as per the limits and entry routes mentioned above.
(c)  Foreign airlines are also allowed to invest in the capital of Indian companies, operating scheduled and non-scheduled air transport services, up to the limit of 49% of their paidup capital. Such investment would be subject to the following conditions: (i) It would be made under the Government approval route, (ii)  The 49% limit will subsume FDI and FPI investment, [...]
(d) In addition to the above conditions, foreign investment in M/s Air India Ltd. shall be subject to the following conditions: (i) Foreign investment(s) in M/s Air India Ltd., including that of foreign airline(s) shall not exceed 49% either directly or indirectly except in case of those NRIs, who are Indian Nationals, where foreign investment(s) is permitted up to100% under automatic route.  (ii) Substantial ownership and effective control of M/s Air India Ltd. shall continue to be vested in Indian Nationals as stipulated in Aircraft Rules, 1937.[...]" (Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020))
Government of India/Ministry of Commerce and Industry (2020), Consolidated FDI Policy (Effective from October 15, 2020)
[<a href="https://dpiit.gov.in/sites/default/files/FDI-PolicyCircular-2020-29October2020_0.pdf">Policy</a>]