In a major policy reform, India\'s federal government yesterday decided to allow qualified foreign investors (QFIs) to directly invest in the equity market. The move is meant to \"widen the class of investors, attract more foreign funds, reduce market volatility and to deepen the Indian capital market,\" the government said on its website. The Securities & Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are expected to issue circulars to ensure that the scheme operates by January 15, it added. \"QFIs have been already permitted to have direct access to Indian Mutual Funds schemes pursuant to the budget announcement 2011-12. Today\'s decision is a next logical step in the direction,\" said the government. In the present arrangement relating to foreign portfolio investments, only Foreign Institutional Investors/sub-accounts and non-resident Indians (NRIs) are allowed to directly invest in the equity market. Under the new guidelines, the Reserve Bank of India would grant general permission to QFIs for investment under Portfolio Investment Scheme (PIS) route similar to foreign institutional investors. The individual and aggregate investment limit for QFIs shall be 5 per cent and 10 per cent respectively of the paid up capital of Indian company. Commenting on the development, Pradeep Unni, Senior Relationship Manager at Dubai-based commodities trading firm Richcomm Global Services DMCC told Gulf News with the Indian rupee shedding 24 per cent of its value against the US dollar last year, inflation still near double digits, growth faltering and most importantly the current account deficit widening, the \"current move can be considered as a very thought-about move from the Indian government to partly solve these problems in a single policy change.\"