The government has cleared a proposal from America Online Inc (AOL), the world's largest Internet service provider, to invest $ 100 million through a newly incorporated Indian subsidiary, Netscape Communications India Pvt. Ltd.

The company has proposed to establish the subsidiary in Bangalore to utilize advanced Internet technologies and a private global network to provide high-quality telecommunications and Internet services related to e-mail. web hosting, Internet fax and telephony and e-commerce services, and to carry out business as an ISP.

The company has also proposed to develop, manufacture, sell, distribute, transfer, assemble and deal in import and export of "all kinds of information technology products and services, including software products," which may include the popular Netscape and CompuServe packages, according to sources.

The proposed investment of $100 million will be spread over five years.

According to persons involved with the company's India business plans, AOL will initially set up a software development centre in Bangalore with the target of employing around 150 Indian personnel in the first year of its incorporation. The development centre would primarily service the software development needs of the parent's business, they added. Later, Netscape India would expand into other businesses, including e-commerce. The company, however, is yet to apply for an ISP license, the sources said.

America Online was founded in 1985 and is based in Dulles, Virginia. It is the world's leader in interactive services, web brands, Internet technologies, and e-commerce services. AOL is a wholly owned subsidiary of AOL Time Warner Inc.