A top Indian government panel has approved a plan to allow foreign direct investment (FDI) in the country’s vast retail market in what would be one of the country’s biggest economic reforms.
However, it said investors would have to put in at least US$100 million to set up multibrand retail stores and would only be allowed to operate in cities with at least 1 million people, the Press Trust of India said late on Friday.
The proposal to more fully open up the Indian retail market, whose annual sales are estimated at around US$450 billion, now must go to the federal Cabinet for approval and then overcome widespread political opposition.
Photo: AFP
The move would mark one of the biggest reforms by India’s Congress--led government. However, analysts say it could be difficult for the embattled government to push through the major changes as it fends off a slew of corruption charges.
Multibrand foreign groups such as US-based Walmart currently operate as wholesalers, but cannot sell directly to the public, amid fears that big international retail chains could swamp small family-run stores.
India’s tight foreign investment rules are aimed at protecting small “mom-and-pop” stores in the sector where less than 10 percent of consumers shop in bigger, well-known department stores.
The policy change would mean foreign retailers could start selling to Indian shoppers through partnerships with Indian retailers and be allowed to hold up to a 51 percent stake in local joint ventures.
India has already allowed 51 percent foreign investment in single--brand retail operations such as Nokia or Reebok and 100 -percent in wholesale cash-and-carry operations.
“Step by step, we’re moving closer to opening multibrand retail in India to FDI. This will invite a lot of interest from retailers the world over,” said Kishore Biyani, chief executive of leading Indian retailer Future Group.
Large retailers such as Walmart and France’s Carrefour have been lobbying India’s government aggressively to open the consumer market to foreign chains as they seek to grow outside saturated Western markets.
India’s top economic adviser Kaushik Basu said in May opening up the retail sector to foreign investors would cut supply bottlenecks and ease stubbornly high inflation, now nearly 10 percent.
Basu said international retail chains would modernize India’s storage and transport methods, reducing spoilage and creating greater competition at the supply level — all of which could help cut inflation.
Some 40 percent of India’s fruit and vegetables rot before they reach the market due to lack of cold storage and poor transport.
The issue of fully liberalizing India’s retail sector has been under debate for years.
The changes would not mean complete liberalization of the tightly regulated retail sector, but could open a major new market for US and European companies.
“Business confidence will grow. It will definitely benefit the farmers as well as consumers, besides attracting more investments,” said D.S. Rawat, secretary-general of the Associated Chambers of Commerce and Industry of India.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last