A group of ministers will soon submit a report on proposals to raise limits on foreign direct investment in key sectors such as telecommunications and insurance, an official said on Friday.
The group's approval is required before the government can seek the Parliament's approval for making changes to any policy on foreign investment.
"They will submit their report in the next few weeks," Prodipto Ghosh, additional secretary in Prime Minister Atal Bihari Vajpayee's office told reporters on the sidelines of a business conference.
A panel headed by a member of the Planning Commission suggested in September that the cap on FDI in basic and mobile telephony be raised to 74 per cent from 49 per cent.
It also said that the FDI limit in insurance be increased to 49 per cent from 26 per cent.
"Relaxation of sectoral caps will increase the flow of foreign direct investment," Ghosh said.
Industry officials said strong FDI would help India achieve double-digit growth rates and cut poverty levels. India's economy grew 5.4 per cent in the past year ended March 2002.
India attracted FDI worth $4.06 billion in the past year, up 65 per cent from the previous year.
But this is considered quite low compared with the $30-40 billion China attracts each year.