The Indian government could be poised to open the door to foreign direct investment in the country, in a move that could have huge ramifications for the ambitions of companies, including Tesco and Wal-Mart, in the burgeoning Indian economy.

Speculation is mounting that a relaxation of FDI rules may be forthcoming after the Indian Ministry of Commerce issued revised guidance on what constitutes a foreign holding in an Indian company.

Under the new guidelines, as long as a company is more than 50%-owned by Indians, the government would consider any investment into that company to be Indian equity, regardless of whether the sector is one in which FDI has been capped, such as multi-brand retail.

The Independent