Indian companies can now list on overseas stock exchanges and raise foreign capital without first being listed on local exchanges, the finance ministry announced on Friday.

The government allowed unlisted Indian companies to list and raise capital overseas as part of its efforts to boost capital inflows. The move is expected to the struggling economy to trim down its huge current account deficit (CAD).

For the financial year 2013-14, the country's CAD is pegged at $70 billion.

A statement released by the ministry said, "It has now been decided with the approval of the Union finance minister that unlisted companies may be allowed to raise capital abroad without the requirement of prior or subsequent listing in India."

Experts are of the view that the move would encourage local firms in the information technology sector as well as those backed by private equity firms to list and raise funds overseas.

The move will particularly benefit export-driven IT firms to explore listing opportunities in the U. S. or London in near future. However, many unlisted mid-sized firms could find it difficult to meet regulatory requirements and cost structures for listing overseas.

Infosys and Wipro are already listed both on local exchanges and in the U. S.