The Indian government has cleared the way for the country to host next year's limited-overs ICC Champions Trophy.

The International Cricket Council had said the biennial event would only be given to India if revenue was tax-free.

The event would have gone to Pakistan, had the Indian board not gained government clearance by the end of May.

"After examining the board's request, a decision was taken that exemption should be granted," Indian finance minister Palaniappan Chidambaram said.

India was the original choice to stage the 2002 tournament.

However, the government refused to provide tax relief and it was switched to Sri Lanka.

Chidambaram said government had decided to extend the benefit to all major sporting events held in India.

"A decision to provide tax exemption to international sporting events would result in awarding of rights to hold the Champions Trophy 2006, but also subsequent international sporting events," he revealed.

"This will not only promote sports but will also result in revenue gain from various sources, especially tourism."