Mahindra, who was appointed to the post almost a year ago, had sent in his resignation to Civil Aviation Minister Vayalar Ravi last month, citing 'conflict of interest' as the reason for stepping down. Officials said the government has accepted the resignation and the Civil Aviation Ministry conveyed it to the national carrier.

In the letter, Mahindra had said that the Mahindra and Mahindra Limited had recently held "fruitful discussions with international aerospace corporations that would throw up opportunities for the group to become a strategic player in the global aerospace components market".

"We are developing the capability to supply components to the major suppliers from where Air India sources its aircraft," Mahindra had said in his letter offering to step down from the Board. As this development would cause a potential conflict of interest and throw up questions of good board practice, he had offered to quit, the letter had said.

Mahindra, along with Chairman of Ambuja Realty Development, Harsh Neotia, Secretary-General of FICCI, Dr Amit Mitra, and former chief of Indian Air Force, Air Chief Marshal Fali Homi Major, was appointed non-official part-time director of the airline.