In a bid to attract foreign funds, government has decided that non-repatriable investments by NRIs, OCIs and PIOs will be treated as domestic investments and will not be subject to foreign direct investment caps, said the media report.
The Union Cabinet, chaired by Prime Minister Narendra Modi, had approved amendments, including changes in definition of NRIs, to be incorporated in the FDI policy.
Investments by NRIs under under Schedule 4 of FEMA regulations will be deemed to be domestic investment at par with the investment made by residents, an official statement said.
The Cabinet's decision is expected to result in increased investments across sectors and greater inflow of foreign exchange remittance leading to economic growth of the country, it added.
The government had earlier raised the FDI limit in sectors such as defence, insurance, real estate, railways and medical devices.
During his foreign visits, Prime Minister Narendra Modi has been reaching out to NRIs to invest in India.
Non-resident Indians too have been demanding that their investment be considered as domestic investment.
A committee, set up to look into the possibility of treating non-repatriable NRI funds as domestic investment, had earlier said that NRIs might prefer investing through corporate entities.