RBI eases rules to boost foreign direct investment

The Reserve Bank of India (RBI) on Thursday relaxed foreign direct investment regulations to allow investors to exit their investments subject to the conditions of a minimum lock-in period and without any assured returns. 

RBI said the relaxation was expected to facilitate great foreign direct investment (FDI) inflows into the country. 

In a statement the RBI said, "It may be recalled that till now only equity shares or compulsorily and mandatorily convertible preference shares/debentures were eligible instruments to be issued to persons resident outside India under the Foreign Direct Investment policy and these instruments were not allowed to have any optionality clause.

It is expected that this relaxation will facilitate greater FDI flows into the country." 

Asia's third-largest economy saw FDI inflows from April to October in 2013 drop 15 percent from a year earlier to $12.6 billion, despite the opening of new sectors. (Economoic Times)