Corporate America on Thursday welcomed the bold move of the Indian Cabinet to permit foreign direct investment in multi-brand retail and remove the cap on foreign direct investment in single-brand business, noting that it will help bring down inflation and create thousands of jobs.
"The singular act of opening the multi-brand retail sector to foreign direct investment will significantly benefit the Indian consumer by spurring the modernisation of India's vast agri-retail marketplace," said Ron Somers, the president of the US India Business Council.
"Investments will now flow into India's farm-to-market supply chain, which will usher in expertise and bring efficiencies to India's supply chain infrastructure.
"Food price-rise and inflation will now effectively be tamed," he said.
"Opening the retail sector will create a larger market opportunity for Indian farmers, increasing quality and choice for India's sophisticated consumers," Somers said.
The USIBC -- a body that represents the views of Corporate America -- hailed India's steady progress in advancing major economic reforms in a statement following Cabinet approval for opening up India's vast multi-brand retail sector to foreign direct investment and removing the FDI cap in single-brand retail.
"This change in policy is a good start to a win-win decision for all stakeholders, including customers, farmers and the government of India," said Dough McMillion, the president and chief executive officer of Walmart International, adding that the decision to allow 51 per cent FDI in multi-brand
These bold reforms have heartened investors from the United States and elsewhere, the USIBC said.
The government's opening of the multi-brand retail sector will benefit Indian consumers by bringing efficiencies and productivity to the farm-to-fork supply chain, while tamping down rising food prices and inflation, the USIBC said, adding that the overall effect of these actions will propel India on the path to becoming the world's third-largest economy, which was earlier predicted to occur by mid-century.
"The government's bold resolve to move on these complex reforms serves as an assurance to investors that its economic liberalisation agenda begun in the early 1990s is very much on track, even in the face of the global economic downturn," the USIBC said.
McMillion said through participation in front-end retail, WalMart looks forward to playing a key role in India's success story by contributing to the country's economy and helping citizens save money so they can live better.
"We will create thousands of jobs through inclusive growth, increase farm productivity and income and help small and medium industries prosper and grow with us," McMillion said.
"We're confident that the government, after seeing the value we bring to India and its people, will view this opening as a first step in further liberalising FDI in retail," he added.
