India says it will open its stock market to individual foreign investors for the first time, in a move aimed at attracting more foreign funds.

The government said in a statement Sunday that it will allow qualified foreign investors to directly invest in the market in order to "widen the class of investors, attract more foreign funds, and reduce market volatility."

The new rules go into effect January 15.

Previously, foreigners could invest in the Indian stock market only through mutual funds or institutional schemes.

India has been dealing with a series of interest rate hikes, rising inflation and a weakening national currency.