Mumbai: The government may do away with rules that put an obligation, mainly on overseas oil firms, to disinvest part of their equity to Indian investors as it bids to remove an irritant for foreign investors.

The sectors where the FDI regime is likely to get liberalised include financial services, agri-products, sports goods, electronics, ground handling aviation services and petroleum products.

The petroleum ministry has agreed to the proposal of the department of industrial policy and promotion (DIPP) and it would form part of the cabinet''s general review of the FDI policy in September.

The policy review on foreign direct investment, proposing relaxation of norms, is likely to be delayed till the end of monsoon session of parliament as the government facing opposition from its Left allies.

"The obligation to disinvest has not served any great public purpose. In most of the cases, it ended up being a bureaucratic hassle for the foreign firms operating in India," a senior government official said.

Moreover, different rules govern different companies and sectors since many of the firms were given a waiver. The government would like an equal treatment for all foreign investors, he said.

Pepsi is among the overseas firms faced with a must-disinvest clause.

The Department of Industrial Policy and Promotion (DIPP) has been engaged in the annual exercise of review of the FDI policy for several months and has received quite a feedback from number of ministries like petroleum, food processing and finance.

Since the exercise is aimed at easing the procedural rules and FDI caps in some of the politically-sensitive sectors, the government does not want them to become a matter of heated debates in parliament, the official said.

The left parties have mostly been opposing further opening up of the foreign investment rules.