The union cabinet on Thursday approved certain amendments to the Foreign Direct Investment (FDI) policy to make investments by overseas Indians in the country easier and simpler.
Overseas Indians comprise Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs).
According to a cabinet communique, the cabinet approved redefining an NRI as an individual resident outside India who is a citizen of India or is an OCI cardholder under Section 7 (A) of the Citizenship Act, 1955, while PIOs who have registered under the August 19, 2002, central government notification "will be deemed to be overseas citizens of India".
Investment by NRIs under the Foreign Exchange Management Act (FEMA) will be treated as a domestic investment at par with investments made by residents.
"The decision to include OCIs and PIOs under NRIs is meant to align the FDI policy with the government policy and provide parity in economic, financial and educational arena," the statement said.
"The amendment is expected to result in increased investments across sectors and greater inflow of remittances leading to the country's economic growth," the statement added.
The FDI policy for investments by overseas Indians was reviewed with amendments as a follow-up of reform measures the NDA government initiated in the past one year and assurances Prime Minister Narendra Modi gave to the Indian diaspora during his official visits to the US, France, Germany, Canada, Australia, Japan and South Korea recently.