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India has decided to allow foreign investors to invest up to $10 billion in domestic mutual funds and the market regulator will issue the necessary guidelines for such investments by Aug. 1, the finance ministry said in a statement on Monday.

The move to allow foreign investors, known as qualified foreign investors, was first proposed by Finance Minister Pranab Mukherjee in the budget for the fiscal year that started on April 1.

At present, only foreign institutional investors and sub-accounts registered with the market regulator Securities and Exchange Board of India, and non-resident Indians are allowed to invest in Indian mutual fund schemes.

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