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Cash-strapped India eases debt rules to woo foreigners

Published on Mar 23, 2013 11:12 PM

NEW DELHI (AFP) - India's cash-strapped government on Saturday loosened debt market rules to draw more foreign investment to finance a record current account deficit as it promised a "next generation" of economic reforms.

Finance Minister P. Chidambaram announced a significant simplification of rules for placements by foreign institutional investors in government and corporate debt to lure more overseas funds.

He also said a "next generation" of reforms to further pry open the still heavily regulated economy and return it to high growth was in the works.

But he warned fallout from the eurozone crisis was hitting investment in Asia's third-largest economy even as attracting more foreign funds has become an urgent priority for the government to fund a bloated current account deficit.

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