Prime Minister Manmohan Singh said Wednesday the government would be abolishing the "restrictive provisions" of a contentious joint venture regulation to ensure increased inflow of foreign investments.

Addressing the inaugural session of the Partnership Summit 2005, organised by the Confederation of Indian Industry (CII) here, Singh said the Press Note 18 had been a source of discomfort to investors.

"I am happy to inform you that we will be doing away with the restrictive provisions of Press Note 18 for all future joint ventures with foreign partners," Singh told the business delegates here.

Press Note 18 requires a foreign partner in an Indian joint venture to get a no objection certificate from the Indian partner to start a new venture in the same field or in an allied area.

"This is a regulatory provision that has been a source of some discomfort to investors," he said, adding measures like Press Note 18 are "anachronisms" in the prevailing industrial scenario.

Singh said in the new dispensation existing joint ventures would continue to be protected by a few provisions of Press Note 18.

New joint ventures and collaborations would be shaped by commercial contractual agreements based on the "free will of partners without government interference," he added.

"For existing joint ventures, the protection will be restricted to the same - and not allied - field and not for defunct or sick joint ventures," said the prime minister.

Industry had earlier urged the government to review Press Note 18 in such a manner that its stringent clauses are diluted to ensure a smooth inflow of foreign capital and protect the commercial interests of domestic industry.