Foreign institutional investors (FIIs) can now invest up to 23 percent in Indian commodity exchanges without government approval, the commerce and industry ministry said Tuesday.

In a consolidated foreign direct investment (FDI) policy document, the government said it had decided to liberalise norms for overseas investments in commodity exchanges.

Till now, overseas investment with a composite FDI and FII cap of 49 percent was allowed in commodity exchanges. Within this overall limit, investment by registered FIIs was limited to 23 percent and investment under the FDI scheme was limited to 26 percent.

For both FDI and FII categories, prior government approval was required.

However, as per the new circular, now the FII investments would not be required to be cleared by the government.

“It has now been decided to liberalise the policy and to mandate the requirement of government approval only for FDI component of the investment. Such investment by FIIs, in commodity exchanges, will, therefore, no longer require government approval,” the Department of Industrial Policy and Promotion said in the new circular.