The deadlock over foreign direct investment in the retail sector continues as government officials on Tuesday informed parties opposing FDI that they will discuss their demands with the Prime Minister Manmohan Singh.
India has not made the giant leap that was needed.
Foreign Direct Investment inflows into India increased 47 per cent to $1.7 billion in April-June quarter this fiscal, compared to $1.1 billion in the same period last fiscal.
The retail sector seeks industry status, which can reduce the cost of capital and to allow FDI in retail that can increase investments and global competitiveness
In big bang reforms, the Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100 per cent foreign investment through the automatic route. Briefing reporters on the decisions taken by the Cabinet, Telecom Minister Ashwini Vaishnav said nine structural reforms for the telecom sector were approved. The definition of AGR, which had been a major reason for the stress in the sector, has been rationalised by excluding non-telecom revenue of telecom companies.
In 1998 and 1999, the Indian government announced a number of reforms designed to encourage and promote a favourable business environment for investors.
Currently, 100 per cent FDI in is permitted if the companies manufacture cigars or cigarettes or allied products.
The retail companies are hoping that the Finance Minister Pranab Mukherjee would accord industry status to the sector and allow unrestricted foreign direct investment inflow.
A panel headed by Economic Affairs secretary Arvind Mayaram had suggested FDI limit be raised to 49 per cent in almost all sectors through the automatic route.
India received $2.21 billion in foreign direct investment in February, showing an annual growth of 74 per cent, taking cumulative inflows to $28.40 billion for the April-February period of the last fiscal.
Dismayed by the BJP's decision to say no to FDI in multi-brand retail in its election manifesto, India Inc has urged the party to reconsider its stand, saying the move may send a wrong signal to overseas investors.
In February, 2010, India attracted foreign direct investment (FDI) worth $1.7 billion. During the 11-month period from April, 2010, to February, 2011, FDI inflows into India declined by 25 per cent to $18.3 billion, which makes it imperative for the country to fine-tune its policies to attract overseas investment.
The UN Conference on Trade and Development study -- World Investment Report 2010 -- ranks India as the 9th most attractive destination for foreign direct investment, up from 13th last year. It received $35 billion in FDI in 2009.
"Foreign Direct Investment (FDI) will bring along backward integration and investment in farm to fork. States like Karnataka, Andhra Pradesh, Tamil Nadu will be able to move produce more efficiently across the country", Confederation of Indian Industry (Southern Region) Chairman T T Ashok said in a statement.
Foreign direct investment (FDI) inflows into India rose 54.8 per cent in November to $1.64 billion compared with $1.06 billion a year ago, a government statement
The government had provided some relief to domestic airlines when ATF prices had sky-rocketed, Patel said, adding 'it would not be possible now.'MIAl has proposed that it may be allowed to levy Rs 350 per domestic passenger and Rs 1,300 per international passenger to meet its funding requirements.
Last year, India was ranked second in global FDI flows after China. While China continues in the top place, the US climbed up to second place this year, thanks to a surge in investments by Chinese and Indian companies, who acquired several sick American firms.
Torrent Pharmaceuticals' Rs 3,000 crore proposal for increasing FII investment limit to 35 per cent was the biggest in terms of value
The European Union on Friday asked India to further open its economy for foreign investments even as the country has taken tentative steps towards liberalising FDI in sensitive defence and multi-brand retail sectors.
The controversy over allowing FDI in retail rocked Parliament for the third day on Tuesday with a united opposition forcing adjournment of both the Houses till noon. Shortly after the Lok Sabha met for the day, members rushed to the Well, demanding rollback of the decision to allow FDI in the retail sector. Members of Trinamool Congress, a key partner of the United Progressive Alliance, kept shouting 'Cancel FDI in retail'.
'As our per capita income increases and various demographic segments emerge, the need for various kinds of protection and risk covers will become even more explicit.'
The government on Wednesday cleared 21 FDI proposals worth Rs 84.90 crore (Rs 849 million), most of which is likely to be brought in by the world's largest chemical company BASF through an open offer.
The Cabinet on Thursday approved 49 per cent foreign investment in insurance companies through the Foreign Investment Promotion Board route ensuring management control in the hands of Indian promoters.
There is huge potential for data analytics insurance sector in India which has over 40 crore life insurance policies.
The discrepancy was pointed out by the finance ministry in the light of changes in foreign direct investment norms, as specified in Press Note II issued earlier this year, while considering the company's proposal to raise Rs 708 crore (Rs 7.08 billion) through fully convertible warrants. Prior to the Press Note II, the FDI component in Kingfisher Airline was just 16.45 per cent.
Bharatiya Janata Party on Wednesday charged that there were differences between Congress party and the government on allowing FDI in multi-brand retail and dared United Progressive Alliance Chairperson Sonia Gandhi, General Secretary Rahul Gandhi and other senior party leaders to make their views public on the matter.
The two ministers are believed to have discussed the issue of redefining foreign direct investment and foreign institutional investment to remove ambiguities.
Foreign direct investment inflows in the country jumped nearly three-fold to $15 billion in 2006-07 as the world's second-fastest growing economy lured investors from across the world.
According to sources, the government will have to allow a minimum of 51 per cent foreign direct investment (FDI) in the multi-brand retail, the same as was permitted in single brand retail.
The exports in 2022-2023 was $79 billion, compared to imports of $50 billion.
Notwithstanding the move to bring foreign direct investment in retail being put on hold in the face of stiff opposition, Rahul Gandhi on Fruday asserted the Congress-led UPA government was determined to implement the decision.
In what will be a historic decision, the Union Cabinet is likely to clear a policy paper that seeks to allow 51 per cent FDI in multi-brand retail trading and 100 per cent FDI in single-brand retail on Thursday.
Bihar Deputy Chief Minister Sushil Modi tells Business Standard that foreign direct investment (FDI) in retail will cause job losses and the state doesn't want it. Edited excerpts:
The Union Cabinet on November 24 approved 51 per cent FDI in multi-brand retail paving the way for global giants like WalMart to open mega stores in cities with population of over one million.
The government on Friday said the foreign direct investment norms in the retail sector would be liberalised further to ensure that investment flows into post- harvest agriculture activities.
Asking the government to tweak FDI norms in multi-brand segment, retailers said sourcing rules must be made similar to that of single brand while demanding foreign firms be allowed to put only 50 per cent of first tranche of investment in back-end infrastructure.
A proposal to hike foreign direct investment cap in helicopter and sea-plane operations, MRO facilities, charters, air-cargo and non-scheduled air operations has been moved by the civil aviation ministry for the Cabinet's consideration.
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