In a major real estate acquisition, the Maharashtra government has bought the historic Air India building in Mumbai from Air India Assets Holding Limited (AIAHL) for Rs 1,601 crore. The move is expected to significantly improve office infrastructure for various state departments currently operating from scattered locations across the city.

Officials plan to use the prominent south Mumbai property to accommodate government offices that have been functioning from rented premises for years. Renovation and interior modifications will be undertaken by the state's Public Works Department (PWD), with authorities targeting completion of the work within the next year.

The acquisition will provide the state administration with approximately 46,470 square metres of office space situated near the Mantralaya, Maharashtra’s primary administrative headquarters.

Addressing a Long-Standing Space Constraint

For several years, the Mantralaya complex and its adjoining facilities have struggled with limited office capacity. The issue worsened after a major fire damaged parts of the state secretariat in 2012, forcing several departments to relocate to alternative premises.

As a result, numerous government offices have been operating from different parts of Mumbai, often far from the central administrative hub. This arrangement has not only affected coordination among departments but has also led to substantial expenditure on office rentals.

The newly acquired building is expected to help consolidate operations and bring key departments closer to the state secretariat.

How the Deal Took Shape

The transaction gained momentum after the Central government approved the sale of the property in 2024. Later, in November 2025, the Maharashtra Cabinet formally cleared the proposal to purchase the building.

The property had been put up for sale by Air India as part of its asset monetisation strategy after the airline shifted its headquarters from Mumbai to New Delhi.

When the sale process began in 2018, Air India reportedly sought around Rs 2,000 crore for the property. At the time, the Maharashtra government offered Rs 1,400 crore, while other interested bidders included Jawaharlal Nehru Port Authority and Life Insurance Corporation of India.

Following the formation of the government led by Eknath Shinde, the state revised its proposal and increased the bid value to Rs 1,601 crore. The government also agreed to waive nearly Rs 300 crore in outstanding dues connected to the leased land, including unrealised income and interest components.

Political Efforts Behind the Acquisition

The process also involved discussions at the Union government level. In 2022, then Deputy Chief Minister Devendra Fadnavis reportedly met Union Civil Aviation Minister Jyotiraditya Scindia and sought priority consideration for Maharashtra in the sale process.

With the purchase now completed, state officials believe the Air India building will become a key administrative asset, helping streamline government operations and reduce dependence on rented office spaces in Mumbai.