New Delhi: A panel of experts will review over the next three months how to encourage foreign investment in the financial sector such as the bond and stock markets, the government said on Thursday.

Identifying challenges: The panel will take views till 10 February, according to a statement, and will submit its report by mid-March. Indranil Bhoumik / Mint

The panel, which has experts from both the private sector and the government, will “identify challenges in meeting the financing needs of the Indian economy through foreign investment", according to a government statement.

The panel will take views on foreign investments till 10 February, the statement said, and will submit its report by mid-March.

The statement comes as the government has promised to liberalize the financial sector in its second term to help channel billions of dollars of Indian and foreign savings into more productive investments.

Federal policymakers, including deputy chairman of Planning Commission Montek Singh Ahluwalia, have said that India needs more capital flows especially for infrastructure sector.

“This is a welcome step because at the moment the investment rules are so complex that many investors are unable to understand them," said D.H. Pai Panandikar, head of private think tank RPG Foundation.