The government announced sweeping changes in India's foreign direct investment policy, opening up the airline business to 100 per cent ownership, relaxing rules for singlebrand retail and defence and putting most sectors on the automatic approval route, continuing with the reforms programme that was kicked off after state polls ended last month.
The announcement also acted as a tonic for markets that were jittery over Raghuram Rajan's surprise weekend announcement that he would return to academics after his term as central bank governor ends in September.
Apple could be a high-profile beneficiary of the changes.
Local sourcing conditions have been relaxed for single-brand retailers, helping companies such as Apple to set up its own stores in India. With its previous application having been denied, officials said the company will need to reapply.
The government's move comes as FDI inflows rose to $55.46 billion in FY16 from $36.04 billion in FY14, reflecting India's growing attractiveness as an investment destination and status as the world's fastest-growing major economy amid global uncertainty.
In the defence sector, the government has dropped the 'state-of-the-art' clause for FDI over the 49 per cent limit. Instead, under the new policy, FDI up to 100 per cent will be allowed through the approval route where the country gets access to 'modern technology', substantially easing the condition.
The FDI limit for the defence sector has also been made applicable to small arms and ammunition manufacturing.
In single-brand retail, the government has eased local sourcing norms for up to three years and another five years for 'state-of-the-art' and 'cutting-edge' technology.
Under the current rules, such sourcing had to start from April 1 of the year of commencement of business or opening of the first store.