|India Decides to Raise Foreign-Investment Caps|
India decided to allow 100% foreign ownership in telecommunication companies and ease overseas-investment rules for several other sectors, as the government aims to attract long-term foreign investment to boost sagging economic growth.
A meeting of senior ministers called by Prime Minister Manmohan Singh decided to scrap the requirement of government approval for certain levels of foreign investment in single-brand retail operations, power exchanges and petroleum refining. The single-brand retail category encompasses retailers that only sell their own brands, such as Swedish furniture giant IKEA—as opposed to supermarkets, whose foreign-ownership levels are currently capped at 51%.
In defense manufacturing, foreign ownership will be allowed beyond the current 26% limit, but on a case-to-case basis. The decision taken at Tuesday's meeting will still need the approval of the federal cabinet. The cabinet is likely to clear the decision next week, he said.
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Published on our website on July 23, 2013