Industry body CII welcomed the government's decision to relax foreign direct investment (FDI) norms in multi-brand retail and raising investment caps in several other sectors.

The government on Thursday erased the mandatory 30 per cent local sourcing norm for the multi-brand retail sector and allowed states to allow multi-brand retailing in cities with population less than one million.

In addition, the government raised FDI caps for several sectors. For example, the FDI limit for the telecom sector was raised from 74 per cent to 100 per cent.

Hailing the decisions, the CII said, "These reforms were much-needed. we hope that we shall see FDI interests in these sectors soon, in keeping with the medium-term promise that India presents."

Last year, the government had made it mandatory for foreign investors to source 30 per cent of material from small local industries and to spend 50 per cent of their investments on creating back-end infrastructure. The government also added the condition that outlets could be opened only in cities with population of more than one million.