India has decided to further open up its stock market as part of its drive to attract more investments and reignite growth of its domestic economy.

In a statement issued on Sunday, New Delhi said that starting Jan. 15, individual foreign investors can commence putting their investments on the local market without resorting to previously available channels - mutual or institutional stock purchases.

The government said its latest move is aimed to "reduce market volatility and to deepen the Indian capital market."

India, the statement said, allowed the wider opening of the local bourse "in order to widen the class of investors ... and attract more foreign funds."

The new policy will be put in place amidst the emergence of recent indicators that economists said could reverse India's gains over the last decade that saw its economy shooting up, prompting analysts to predict that India will be one of the dominant economies in the years ahead.

But strings of interest rate hikes that were implemented since last year and rising inflation threaten to stall or even arrest the country's economic expansion, market experts said.

Analysts added that rising costs over the years failed to convinced the country's central bank to restrain the interest rate, which according to Agence France Presse has moved up 13 times since March.

Despite policy makers' efforts to control inflation, its level now stands at 9.11 percent, defying the higher cash rates that appeared to have worsened the situation instead of easing pressures.

From enjoying near two-digit growth levels over the past few years, India saw its expansion now limited to 7 percent and the outlook appears to be failing the rich promises seen only some years ago.

India has already adjusted its growth projections for fiscal 2012, forecasting only 7.5 percent by March this year, AFP said, down from the 9 percent previously set.

The downward revision came as the main Sensex index suffered retreats of up to 25 percent last year, which prodded many experts to brace for further slides in 2012.

Also, many economists noted that the dipping value of India's currency has been wiping out the country's purchasing power, a spectre being felt mostly by local consumers and also blamed by officials for the local equities' receding values.

While dodging blame for costly mistakes that may have stalled its growth, India's finance officials also underscored the role of global economic developments, specifically the European debt situation, to the country's economic environment.

Economist view the market decision as key to reinvigorate the domestic economy, and more importantly to refuel growth in the stock market, which according to AFP lured some $29 billion from foreign buyers in 2011.