NEW DELHI (AP) — India announced radical changes in its foreign direct investment rules Monday to attract overseas investment into its aviation and defense industries.
Defense and airlines industries can now be 100 percent foreign owned, after previous rules allowed 74 percent and 49 percent foreign ownership, respectively. Investments in pharmaceuticals, food products and single-brand retailing were also liberalized.
The prime minister's office said in announcing the changes that the opening of key sectors of the economy would give an impetus to job creation and infrastructure development.
The changes were meant to liberalize and simplify the foreign direct investment policy to make it easier to do business in India, the prime minister's office said in a statement.
The foreign investment changes follow the announcement last week of a new aviation policy aimed at increasing regional connectivity, boosting cargo operations and making it easier for passengers to fly.
This is the second major set of FDI-related reforms announced by Prime Minister Narendra Modi, who swept to power two years ago on the promise of overhauling the economy.
While international investors and retailers have found the Indian market attractive, they have been held back by India's notorious red tape, sluggish bureaucracy and by a jumble of regulations that make it difficult for companies to break into the market.
The government's statement hailed the changes as making India now the most open economy in the world for foreign direct investment.