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NEW DELHI, July 16 (Reuters) - India relaxed foreign directinvestment (FDI) rules on Tuesday in a broad swathe ofindustries including telecoms, single brand retail and oil andgas in a bid to lure capital inflows, prop up a sliding currencyand rev up growth.
In a meeting of senior cabinet ministers, Prime MinisterManmohan Singh cleared plans to allow 100 percent FDI intelecoms, Commerce and Industry Minister Anand Sharma toldreporters.
The move will allow companies such as Vodafone Group Plc, Telenor ASA and Sistema to operate inthe country without requiring an Indian partner. Foreigninvestors are currently allowed to hold a maximum 74 percent inlocal phone carriers.
Sharma added that the government will have to approve anyFDI proposal beyond 26 percent in the defence production sector,on condition it involves state-of-the-art technology.
India's weakest economic growth in a decade and a recordhigh deficit in the current account, the broadest measure of acountry's international trade, have made the rupee theworst-performing emerging Asian currency so far this year.
It hit an all-time low of 61.21 per dollar last week and isdown nearly 10 percent against the dollar since May.
To stabilise the currency, the central bank on Monday nightraised short-term borrowing costs, restricted funds available tobanks and said it would sell 120 billion rupees ($2.03 billion)in bonds, effectively draining cash from the market.
