India eases foreign investment rules to aid economic growth

India's cabinet announced Wednesday that it would ease restrictions on foreign investment in four key sectors in a bid to shore up support for the flagging economy.

Asia's third-largest economy has slowed in each of the past three quarters -- losing its status as the world's fastest-growing and piling pressure on Prime Minister Narendra Modi, whose government has unveiled a slew of measures in recent weeks to kickstart growth.

On Wednesday, the government approved 100 percent foreign direct investment in the coal mining and contract manufacturing sectors and allowed FDI of up to 26 percent in digital media. It also loosened sourcing requirements for single-brand retailers.

India's commerce and industry minister Piyush Goyal said the measures would "boost exports... and create massive job opportunities".

The announcements came two days after India's central bank announced a $24-billion windfall for the cash-strapped government, which is also facing a jobs crisis -- with unemployment at its highest since the 1970s.

The auto sector has been particularly badly hit, with car sales plunging in July for the ninth month running, while weak consumer spending and high taxes have hit demand for everything from biscuits to hair oil.

Finance Minister Nirmala Sitharaman recently revealed several measures to help the economy, including bringing forward a $10-billion liquidity lifeline for credit-shy banks and rolling back an extra levy on equity sales that had spooked foreign investors.

Sitharaman and other senior officials have hinted that more steps could soon be announced to tackle economic woes.

"The changes in FDI policy will result in making India a more attractive FDI destination, leading to benefits of increased investments, employment and growth," the government said in a statement.