The Cabinet's decision to relax FDI (foreign direct investment) norms in various sectors would make it a much more attractive destination for overseas investors, US-India Strategic Partnership Forum (USISPF) said.
The government has eased norms for investment in single brand retail, construction and power exchanges.
The Cabinet also decided to allow 100% FDI in construction development relating to building townships, housing, infrastructure and real estate broking services.
"It has been decided to clarify that real estate broking service does not amount to real estate business and is therefore eligible for 100% FDI under automatic route," said a government statement.
Construction is currently feeling a slowdown and the move could help the sector.
The decisions taken by the Union Cabinet come ahead of Prime Minister Narendra Modi's visit to the World Economic Forum (WEF) meeting in Davos where he will hold discussions with CEOs of top multinational companies on the investment opportunities being thrown open in India.
"The relaxations in FDI policy announced by the Cabinet are most welcome and would certainly lead to a further increase in foreign investment inflows," said Chandrajit Banerjee, Director General of the Confederation of Indian Industry.
The amendments are intended to liberalise and simplify the FDI policy so as to provide ease of doing business.
“In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment,” the government said in a statement.
Coming close on the heels of the ambitious target to lay out 83,000km of by the Ministry of Road Transport and Highways, the hope is that the FDI relaxation will help lure global funds and bidders to India.