In a major policy reform, the government today announced flexibility for Indian companies to raise overseas capital. Under the new norms, Indian companies have been allowed to issue equity against import of capital goods and liberalise conditions for seeking foreign investment for production and development of agriculture seeds. The facility of conversion of capital goods import into equity was earlier available for companies raising external commercial borrowings. The government also removed the restrictive condition of obtaining prior approval of Indian companies for making investments in the 'same field'. It is expected that this measure will promote the competitiveness of India as an investment destination and be instrumental in attracting higher levels of FDI and technology inflows into the country. In a major initiative to plug loopholes, the government has classified companies into two categories 'companies owned or controlled by foreign investors' and 'companies owned and controlled by Indian investors'. The government has done away with the earlier categorisation of 'investing companies', 'operating companies' and 'investing-cum-operating companies'.The decision would have a bearing on the companies with majority foreign equity as they would now be classified as foreign companies. The policy guidelines are revised every six months.