Mumbai: The government is likely to club both direct and indirect overseas investment to determine the extent of foreign direct investment (FDI) in a company. This is the view emerged after the Hutch-Vodafone issue, sources close to the developments said.

The government is expected to change foreign investment norms for sensitive sectors like aviation, petroleum and the retail sectors during the annual review next month.

The review, which is long overdue, has been delayed as inputs from the various ministries have not yet been received.

However, sources said, the process of consultation among various ministries on FDI is in progress, and is expected to be completed soon. The changes in FDI regime are expected to be announced early next month.

Meanwhile, earlier reports had said that the government might allow foreign investors pick stake in commodity exchanges and effect changes in norms and caps for aviation, petroleum and retail sectors.

While the government is extra cautious on the politically-sensitive retail sector, it may liberalise FDI norms for asset reconstruction companies where the limit currently stands at 49 per cent, subject to approval by the foreign investment promotion board.

The government is also likely to review the cap on voting rights in the banking sector as also the condition that 26 per cent of the equity in petroleum sector must be divested in favour of Indian entities in five years.

align="left">In aviation, the government is yet to detail the proposal to set up a separate head of air traffic services. The FDI norms here will differ according to the constituents of the various services.

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