The Union government may relax norms for foreign direct investment to increase fund flow in the monetary system of India. Union Commerce and industry minister, Kamal Nath said that the government is thinking to reduce FDI cap for many sectors such as defense equipment manufacturing and multi-brand retail. 

It would help India to increase investment and reduce deficits amid global financial crisis. The government had already increased FDI limit for insurance sector from 26 per cent to 49 per cent.

Mr. Nath said that the country has a sound financial health and India would grow with steady pace despite the global slowdown. The country has witnessed an increase of 259 per cent in FDI in the month of September. FDI inflow in September stood at $2.56 billion as compared to $713 million for the same period of last month. The government is optimistic to achieve its FDI target of $35 billion in the current fiscal despite unfavorable global financial conditions.

The union cabinet would consider FDI norm revision in its next meeting. Meanwhile, Federation of Indian Chambers of Commerce and Industry (FICCI) asked the government to reduce FDI cap for telecom, multi retail and aviation sector.