"The department of telecommunications (DoT) will now send a detailed note to DIPP, which will take it forward for inter-ministerial consultations before placing it before the cabinet for approval," said an official who was present at the meeting.
The home ministry had earlier objected to the proposal on 100% FDI in Indian telecom companies on security grounds. It was not clear at the time of going to the press whether the telecom commission had addressed those concerns, but the senior official said: "We hope the cabinet will clear this decision before the end of July."
There have been persistent rumours about the promoters of some Indian telecom companies wanting to sell out. Tuesday's decision, once cleared by the cabinet, is expected to pave the way for several mergers and acquisitions in the telecom sector.
Russian telecom giant Sistema and Reliance Communications welcomed the telecom panel's decision.
Meanwhile, DIPP sources said the government may allow foreign retail chains to set up shop in towns with populations of less than one million, which is not permitted under the guidelines as they now stand.
The government is considering easing several other provisions as well to attract FDI in the retail sector.