One way to look at the changes in Foreign Direct Investment policy announced by the government on Wednesday is as a source of material for Modi to talk about at the World Economic Forum\u2019s annual summit in Davos<\/p>\n
As some critics have pointed out, the automatic approval of 100% FDI in single-brand retail comes with new caveats to replace existing ones and which will not be easy to meet for most companies. The clarification regarding real estate broking services not being real estate business is unlikely to mean much \u2013 in terms of investment. The only significant change has been the decision to allow foreign airlines to acquire up to 49% in Air India, these critics admit, but we are still far too early in the disinvestment process of the state-owned airlines to make much of this.<\/p>\n
Even while acknowledging that changes in FDI policy should not be equated with big reforms \u2013 that description should be reserved for such changes as fundamentally reshaping agricultural or labour markets \u2013 this criticism is a tad unfair.<\/p>\n
While there have been efforts by previous governments to divest part of all of the state\u2019s stake in Air India, none has shown as much commitment and intensity as the current National Democratic Alliance. A consultant has been appointed; the process is expected to start in February; and now, there\u2019s the announcement that foreign airlines can hold 49% as long as control and management is with Indians or Indian companies. Apart from increasing the number of potential bidders interested in buying into Air India, this could also result in the emergence of interesting alliances between Indian investors or airlines and foreign airlines.<\/p>\n
As for the relaxation of the policy on retail \u2013 it is worth repeating that this isn\u2019t multi-brand retail, which will facilitate the entry of retail giants such as Walmart \u2013 it was much needed, and will probably make India a preferred destination for several global manufacturer-retailers who already source significantly from India for their global operations.<\/p>\n
Interestingly, the Air India divestment is a politically contentious one (although it isn\u2019t clear how the Bharatiya Janata Party\u2019s ideological parent the Rashtriya Swayamsevak Sangh feels about it). The change in FDI-in-retail policy isn\u2019t as contentious, but it is a brave move because the RSS has always been opposed to it and the BJP\u2019s traditional voter base includes a lot of traders and retailers. The message seems to be that this government will push ahead with progressive economic policies.<\/p>\n","protected":false},"excerpt":{"rendered":"
One way to look at the changes in Foreign Direct Investment policy announced by the government on Wednesday is as a source of material for Modi to talk about at the World Economic Forum\u2019s annual summit in Davos As some critics have pointed out, the automatic approval of 100% FDI in single-brand retail comes with […]<\/p>\n","protected":false},"author":1,"featured_media":18348,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-18347","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/18347","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=18347"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/18347\/revisions"}],"predecessor-version":[{"id":18349,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/18347\/revisions\/18349"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/18348"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=18347"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=18347"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=18347"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}