India's SpiceJet says in early talks with Gulf carriers for investments

India's SpiceJet aircraft prepares for landing at the airport in Mumbai July 15, 2008.

NEW DELHI (Reuters) - Indian low-cost airline SpiceJet (SPJT.BO) is in "very preliminary" discussions with various Gulf carriers for possible investments, but any decision will be taken only after the government relaxes rules, a spokeswoman told Reuters.

The Indian cabinet will consider a proposal on Friday to allow foreign airlines to buy stakes in local carriers, moving forward with a much-delayed reform that could revitalize debt-ridden domestic carriers.

Under current rules, foreign airlines are barred from buying stakes in domestic carriers, although foreign investors are allowed to hold a cumulative 49 percent. If the proposal is approved, foreign airlines would be allowed to buy similar-sized shareholdings.

(Reporting by Anurag Kotoky; Editing by Prateek Chatterjee)