NEW DELHI, June 20 (Xinhua) -- In a drastic move to open its market to foreign investors, India Monday said on Monday that it will allow 100 percent foreign direct investment (FDI) to almost every sector, including aviation and defense.
"With these changes, India is now the most open economy in the world for FDI," said a Commerce Ministry statement.
This is the second biggest reform in FDI after Prime Minister Narendra Modi came to power in May 2014.
In the defence sector, condition of access to state-of-the-art technology in the country has been scrapped, while the government also permitted 100 percent FDI in civil aviation, animal husbandry and trading, including through e-commerce, in respect of food products manufactured or produced in India.
India will also do away with restrictions on local sourcing and relax such norms up to three years while allowing a relaxed sourcing regime for another five years for Single Brand Retail Trading of products with state-of-the-art and cutting edge technology, according to officials.
The FDI on broadcasting carriage services has also been widened to 100 percent in teleports, DTH, Cable Networks, mobile TVs, and Headend-in-the Sky Broadcasting Service.
The FDI continues to be prohibited in lottery, gambling, atomic energy, real estate and Real Estate Investments Trusts and railways operations.
The latest move came two days after Reserve Bank of India (RBI) Governor Raghuram Rajan said he would not seek a second term after Sept. 4.
Existing rules allowed FDI up to 49 percent on a case-to-case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country.
The Mumbai exchange's Sensex jumped 241.01 points to close at 26,866.92 after the new FDI norms were announced.
