India eases foreign investment rules to boost growth

India has further eased rules on
foreign direct investment in a range
of industries in an attempt to support
the sliding currency and boost
growth.
Senior cabinet ministers and Prime
Minister Manmohan Singh approved the
plans at a meeting late on Tuesday.
The move will allow 100% foreign
ownership in the telecommunications
industry, up from 74% at the moment.
The reforms still need clearance from the
full cabinet.
In September last year, the government
announced the opening up of India's
huge retail sector to foreign
supermarkets, which led to protests in
the streets from small shop owners.
Tuesday's move would allow companies
such as Britain's Vodafone Group and
Norway's Telenor ASA to operate in the
country without the need to partner with
an Indian company.
Restrictions in a dozen other industries
including insurance and tea plantations
would be relaxed or abolished, said
Commerce Minister Anand Sharma.
"We expect more foreign direct
investment to flow in with these
decisions," Mr Sharma said at a press
conference.
In the defence sector, the cap for foreign
direct investment will remain at 26% but
proposals beyond that will be assessed
on a case-by-case basis.
Economist say attracting investors is key
to bolstering India's economy, which
expanded at its slowest pace in a
decade.
The Indian rupee has fallen in value to
record lows in recent weeks, hitting an
all-time low of 61.21 against the US
dollar.