NEW DELHI: India has allowed aviation companies to borrow up to $1 billion from overseas to meet their working capital requirement for one year, the finance ministry said in a statement on Thursday.

Finance Minister Pranab Mukherjee had proposed the move in his federal budget for 2012/13 that was announced in March.

The statement also said the Reserve Bank of India would consider relaxation in average maturity of overseas borrowing above $20 million from five to three years for the aviation sector.