The Indian government can ease norms of foreign direct investment in the country. It is seriously discussing the matter to liberalize the rules for FDI. The Indian financial system is facing liquidity crunch following global financial crisis. It would soon take more steps to safe Indian interests from global slowdown.

The Department of Industrial Policy and Promotion (DIPP) and the finance ministry are working on the idea to ease cap on FDI in single-brand retail. Thus, 100% foreign investments are possible in coming days. It is noted that Indian norms permits only 50 per cent FDI in single-brand retail. The proposed steps may lead to increase foreign funds inflow in India and ease liquidity crisis.

FDI can also be increased in asset reconstruction companies (ARCs). It stands at 49%, currently. More FDI in ARC would create a buffer for the country’s financial system. The government is also likely to change norms for PN 1 notes which are required to get no objection certificate to set up business in the country.