NEW DELHI • Prime Minister Narendra Modi's offer to sell flag carrier Air India attracted zero interest from investors, dealing a blow to his government's most high-profile privatisation plan, aimed at disposing of the money-losing company.

As the deadline to show initial interest expired on Thursday, no bidder had come forward to propose buying 76 per cent of Air India, which was offered along with US$5 billion (S$6.7 billion) debt, Aviation Secretary R.N. Choubey told reporters in New Delhi. "We were certainly looking forward to better participation than this," he said.

India will start the next decision process on Air India stake sale in two weeks, he added.

The government will review the sale proposal after the failed attempt and make any changes, if needed, Economic Affairs Secretary Subhash Chandra Garg said separately.

The lack of interest also means the government is stuck with an enterprise that has survived on taxpayer money for the past decade. Interested parties baulked at the terms when the government made it clear that it did not wish to sell Air India in parts. IndiGo, the nation's biggest airline, pulled out in April.

Some media had reported that Singapore Airlines, Qatar Airways and conglomerate Tata Group were potential bidders, but none of them showed interest before the deadline expired.

The finance ministry, while announcing it would sell 76 per cent of Air India, also said the buyer needs to absorb two-thirds of the airline's US$7.8 billion debt.

BLOOMBERG