In 2012 the IOC suspended the country for electing an official that had been accused of corruption, but in light of India's recent election, the ban has been lifted.
"It is the first time in Olympic history that a suspension of an NOC (National Olympic Committee) has been lifted during an Olympic Games," the IOC said in a statement Tuesday.
Before the decision was made, Indian athletes were competing in the Sochi Games under the IOS flag. They'll be able to walk behind their national flag at the Games' closing ceremony on Feb. 23.
"To symbolically mark the lifting of the suspension and in recognition of the three Indian athletes competing in Sochi, the Indian flag will be raised in the Olympic Village," the IOC said Tuesday.
Vijay Kumar Malhotra, the former acting president of Indian Olympic Association, said he was "happy the suspension is over" and that Indian teams would now be able to "take part in the International events under the national flag."
India's suspension began in December 2012 when Lalit Bhanot, who spent 11 months in jail on corruption charges, was elected to a top position in the government. As a requirement to participate in the Olympic Games, the IOC delegation has a stipulation that "no person convicted or charge-framed can run for a position within the organization."
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