The sports ministry's decision came minutes after HI withdrew the team from the 22nd edition of the tournament after the SAI refused to pick the airfare tab for the tournament to be held in Ipoh, Malaysia March 9-17.
Sports secretary Pradip Kumar Deb told IANS that the ministry has cleared the trip after the case was forwarded by SAI, which had refused to sanction the trip citing budget issues.
"We have an annual budget of Rs.5.94 crores for Hockey India, but they crossed it and we have already spent Rs.11.27 crores. So SAI didn't clear the case and forwarded it to us. I have cleared the trip since Sultan Azlan Shah Cup is a top tournament and the team will get good exposure," said Deb.
"But we have warned HI that in future they should not cross the budget," he added.
HI said SAI has made it clear that the men's team will play the tournament at no cost to government.
"Hockey India has been forced to withdraw its participation from the tournament. Government has always covered the airfare of the team for this tournament till date," HI said in a statement.
India are five-time champions in the tournament. They finished third in the last edition in 2012 and were joint winners in 2010 with South Korea. They were winners in 2009 as well.
The tournament will provide India the much needed exposure of playing against higher-ranked teams like Australia, New Zealand, Pakistan and Korea.
Earlier this month, HI selectors and government observer had announced the team that would be led by Danish Mujtaba. The team is undergoing training here with the prior sanction of the SAI.
The Sultan Azlan Shah Cup Hockey Tournament is an A-Grade tournament sanctioned by the International Hockey Federation (FIH).