India eases foreign investment rules in 15 major sectors

NEW DELHI (Reuters) - India has eased foreign direct investment norms in 15 major sectors, including mining, defence, civil aviation and broadcasting, the government said on Tuesday, in a bid to drum up investment and speed growth.

The government also increased the financial power of the Foreign Investment Promotion Board to give single window clearance for investment projects of up to 50 billion rupees ($753.35 million), from 30 billion.

"The crux of these reforms is to further ease, rationalise and simplify the process of foreign investments into the country and to put more and more FDI proposals on automatic route instead of government route where the time and energy of the investors are wasted," the government said in a statement.

The reforms were announced as Prime Minister Narendra Modi seeks to regain the political initiative after his Bharatiya Janata Party (BJP) suffered a humiliating defeat last Sunday in Bihar election that has reinvigorated opposition parties.

Modi hopes the measures, most of them aimed at cutting red tape, will help bypass parliament, where his reforms have run into political opposition.

The statement listed the sectors for which investment norms have been eased, but did not specify the precise steps. The sectors include construction, agriculture and mining.

Within defence manufacturing, firms can automatically increase foreign ownership to 49 percent, without seeking government approval.

The government said it was also easing manufacturing rules to enable firms to move from assembling products to making them in India.

"(We are) opening up the manufacturing sector for wholesale, retail and e-commerce so that the industries are motivated to Make-In-India and sell to customers here, instead of importing from other countries," it said.

Modi heads to Britain this week to strengthen economic ties with the world's fifth largest economy.

A government source said the reforms were being planned for a while and were not related to the election loss in the populous eastern state of Bihar.

During the period from January to June, foreign direct investment flows into India rose to $19.4 billion, up 30 percent from a year earlier.

($1=66.37 rupees)

(Reporting by New Delhi bureau; Writing by Sanjeev Miglani; Editing by Malini Menon and Clarence Fernandez)