Budget airline AirAsia India said on Wednesday that it planned to gradually expand its fleet and network in India as it seeks to boost its small share of a fast expanding domestic market.

The airline, a tie-up between Malaysian carrier AirAsia Bhd and India's Tata Sons conglomerate, said it planned to add a seventh Airbus A320 jet to its fleet and bring the south Indian city of Hyderabad into its network of destinations by September.

Speaking at a press conference on Wednesday, AirAsia India's Chief Executive Amar Abrol said the airline was looking to expand further and that it would be investing significant sums of money in the future.

The company also has international expansion in mind, but its focus for now is to increase its fleet size to 20, Abrol said in an interview with Reuters.

"We are evaluating right now, we are in the midst of finalizing a roadmap for 20. As soon as that's done, our team will work on international plans," he said.

Under new rules, domestic airlines can fly overseas as long as they deploy 20 aircraft or 20 percent of capacity in India, whichever is higher. Airlines previously had to wait five years before they were permitted to fly on foreign routes.

AirAsia India and its rival Vistara - a tie-up between the Tata Group and Singapore Airlines Ltd - are rushing to expand fleets so that they can fly overseas sooner and vie with local rivals such as Jet Airways (India) Ltd and state-owned Air India Ltd which already fly internationally.

He said a natural fit for the company would be to expand to destinations in the east within around four hours flying time of India's major cities.

Low-cost carriers in India such as SpiceJet and InterGlobe Aviation Ltd's IndiGo also fly overseas but mainly on short-haul routes.

Wadia Group-owned GoAir earlier this week also won government clearance to fly on some overseas routes.