'We do not mind the barring of overseas investment in the consumer products sector,' said Venugopal Dhoot, chairman of Videocon International, a leading conglomerate in the white goods sector. Most Indian manufacturers of consumer durables already have tied up with multinationals for technology transfer, so Indian consumers will continue to get the latest products through these collaborations.' A director with the Arvind Mills group, Sanjay Lalbhai, said: 'Indian industry is well on the road to being self-sufficient.

'Any recent advances in technology can always be imported against royalty payments to collaborators.' The stock markets are particularly buoyant, after a prolonged period of frustration and uncertainty.

A relieved Bombay Stock Exchange president M.G. Damani said: 'The policy is pragmatic and the nation will benefit immensely, but it will require tremendous political will to implement these policies.' Stock exchange executive director M.R. Mayya said: 'It is a welcome deviation from that which was followed by the Congress, which allowed indiscriminate foreign direct investment in all sectors.

'This was not needed. But we do need investment in sectors that involve heavy technological input.' The markets were particularly happy the government would continue to open up the finance sector.

'The fact that suitable policies will be framed for domestic savings and capital formation augurs well from the capital market's point of view,' the chairman of J.M. Financial Services, Nimesh Kampani, said.

'I am particularly happy about the move to create a new set of tax policies for attracting both domestic and foreign investment into core sectors,' he said.