India has put a plan to open up its retail industry to foreign supermarkets on hold, a senior government source said yesterday, an embarrassing turnaround for a beleaguered government fighting to retain the support of key allies.
The move to allow global giants such as Wal-Mart into India’s US$450 billion retail market, the first major economic reform since Indian Prime Minister Manmohan Singh’s graft-riddled term began in 2009, has been met with fierce opposition from some who say it will destroy the livelihood of millions of small traders.
“This is a pause,” the government source with knowledge of the matter said. “Do not see it as a rollback, as if the government is giving up on it. This is just a small pause.”
The idea appears to be to give the under-fire ruling party time to gain the support of its key coalition allies.
“Parliament needs to get going again. There is so much that the government needs to do,” the source said, a day after the government’s biggest ally said the policy was being sidelined because of disagreement within the ruling coalition.
Any postponement or watering down of the policy would be a huge embarrassment for Singh’s government, which has failed to pass any big-ticket economic reforms as it struggles with allegations of widespread graft.
Singh has lost much of his credibility as the reformer who turned India from near-bankruptcy 20 years ago to an economic wonder, and foreign investors are seen spooked by a growing sense of policy paralysis that Asia’s third-largest economy can ill-afford as once-booming GDP growth begins to temper.
Originally, allowing foreign -direct investment into a retail industry dominated by small shops was trumpeted by Congress as a policy that would help ease high inflation, improve supply-chain infrastructure and create millions of jobs.
The main opposition Bharatiya Janata Party has led protests against the reform in parliament that have paralyzed both chambers every day since the 21-day winter session opened last week.
Mamata Banerjee, the firebrand leader of the Congress party’s biggest ally and a opponent of the policy, said on Saturday the government had told her the plans would be put on hold until a consensus had been reached.
Her West Bengal-based Trinamool Congress brings 19 votes to Singh’s coalition, which relies on allies to hold a wafer-thin majority in New Delhi.
Ruling parties in India’s colorful democracy are often forced to rely on fickle allies, who can use the importance of their votes in the national parliament to negotiate concessions or support for the regions or states they represent.
“This is just Indian politics,” the source said. “Parliament is being stalled by an issue that only a few months ago everyone was in agreement with.”
The controversy comes as the ruling party fights to fend off criticism that it has failed to tackle high prices and maintain high economic growth — and as key state elections loom next year and a general election beckons in 2014.
Possible dilution of the policy could include lowering the 51 percent foreign investment permitted under the current rules, increasing the percentage of products to be sourced locally, or the amount firms must spend on developing infrastructure.
Congress officials were still negotiating with its allies on the issue and said the policy had not been abandoned, local media reported yesterday, citing unnamed sources.
The reform, as it was first presented, would allow global chains like Wal-Mart, Tesco PLC and Carrefour to own up to 51 percent of retail ventures and allow foreign firms to fully own single-brand retail operations.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to