India Opening Markets to Outsiders

September 25th, 2012
in econ_news

India-flagSMALLEconintersect:  India has decided to reverse a policy of inhibiting foreign companies from entering their domestic markets.  This is part of the new effort by the Indian government to try to increase foreign investment in the country.  One of the first big names to announce plans to open retail facilities in India is Walmart.  The company has announced that it expects to open its first store in India within 12-18 months.

Follow up:

The changes in policy have come after the Indian economy showed signs of serious slowing this summer.  Just six months ago India passed tax changes retroactively that affected foreign companies that had been doing business.  One case involved a 40-year retroactive tax increase implemented in April.  (See Sanjeev Kulkarni, GEI News.)

The reversal of the foreign investment unfriendly actions and the lowering of other barriers against foreign company entrance, expansion and investment in India has led investment management companies like Blackrock to upgrade India.  This comes as the Indian stock market has been one of the best global performers in recent months.

An important factor for India is the infrastructure investments that foreign companies will make directly and support through payment of taxes.  This is discussed in the following CNN video featuring Richard Heald, CEO of UK India Business Council:



Here are the stories that cover the areas discussed above and other recent news from India:

Walmart aims for first India store in 12-18 monthsUS giant Walmart said on Friday it aims to launch its first retail store in India within the next 18 months after the government opened the vast consumer market to foreign chains.

4 Reasons We’re Upgrading India


By Russ Koesterich: Indian stocks have rallied recently, driven in part by improving economic conditions – and the fact that the government is beginning to relax some restrictions on foreign investors. In fact, in just one day this week, foreign investors bought more Indian equities than in the previous two months according to Bloomberg…
Richard Heald, CEO of the UK India Business Council, talks to CNN about India’s economic reforms.

By MA Managed Futures Fund:After I returned back to the States from a late-July trip to India, I had written an analysis on the benefits of buying the Indian Rupee through ICN (WisdomTree Dreyfus Indian Rupee ETF).My reasoning was based on the political and economic changes I had witnessed in India that I knew would be positive for the economy as well as the currency…

India’s forex reserves jump to USD 294.5 billion

India’s foreign exchange reserves rose by USD 2.44 billion to USD 294.47 billion on the back of a healthy increase in the currency assets during the week ended September 14.

Larsen and Toubro: The firm that builds India

Larsen’s labourers loosed

“HELLO! Hello!” is what A.M. Naik says when he wants to ensure you are listening. He might lock a massive hand around your wrist, too, and grin. A bear of a man, aged 70, he lives and breathes the firm he has run since 1999 and worked at for over four decades, Larsen & Toubro (L&T)…

Exporters acknowledge that awareness of pesticide residue is ‘ low’ among the farmers which is expected to put hurdles in agricultural and processed food products exports.

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