In a major financial decision to attract foreign capital, the cabinet committee on economic affairs on Wednesday decided to open up the foreign direct investments (FDI) in the limited liability partnership (LLP) firms allowed to be set up in India under a new law brought in force two years ago.

Such LLPs, however, will not be allowed to operate in agricultural or plantation activity, print media or real estate business and will not be allowed to make any downstream investments.

Its implementation is sought be calibrated, starting with the "open" sectors that do not require monitoring. Sectors and activities in which 100 per cent FDI is already allowed through the automatic route will be covered in the first phase, though such FDIs will require the government approval.

LLP is a new hybrid entity envisaged under the Limited Liability Partnership Act, 2008, incorporating the features of a body corporate and a partnership. Presently, FDI is allowed in the Indian companies as also in a firm or a proprietary concern, subject to certain conditions.

The government made it clear that the Foreign Institutional Investors (Flls) and Foreign Venture Capital Investors (FVCIs) will not be permitted to invest in LLPs, which will also be barred from availing any External Commercial Borrowings (ECBs.)