M&S in India: one brand or many?
Last year, the Indian government changed its policy to allow 100 per cent FDI in single brand retail, removing the 51 per cent cap. Since then a stream of companies – from H&M to TM Lewin – have kicked off plans to enter Asia’s third-largest economy.
But there’s been a bit of a hiccup this week as government ministries have fussed over the specifics – and how to deal with British retail stalwart M&S. Continue reading »
Jet-Etihad deal: Air India the loser
After months in the pipeline, a deal has finally been announced between India’s Jet Airways and Etihad.
The UAE’s national carrier will pay Rs754.74 per share for a 24 per cent stake in Jet, valuing the deal at Rs20.6bn ($380m). It’s good news for both parties in the deal. But it’s very bad news for Jet’s main competitor – the state-owned Air India. Continue reading »
India: mom-and-pop 2, global brands 0
Global hypermarket chains such as Walmart, Tesco and Carrefour have been in no rush to set up shop in India since New Delhi’s September decision to permit up to 51 per cent foreign ownership of retail ventures.
For the most part, global grocers are concerned about the various conditions imposed on such enterprises, as detailed in the Financial Times, with very different rules for “multi-brand” vs “single-brand” retail. But that’s not the only problem. The experience of US-based office supply and stationary stores in India also stands as a cautionary tale for prospective investors. Continue reading »
Relief at Moody’s India verdict
When times are tough, you don’t need good news to cheer investors – even an absence of bad news comes as a relief.
After weeks of concern around a possible sovereign downgrade for India, Moody’s has reaffirmed its government bond rating of BBA3, labelling it “stable”. Continue reading »
Walmart in India: tough steps [updated]
After years of waiting for permission to set up shop in India, Walmart should be heaving a sigh of relief, as it finally reaches the light at the end of the long dark tunnel of Indian policy-making.
India’s Congress-led government has approved foreign direct investment in retail, paving the way for the US-based retailer and its rivals such as Tesco and Carrefour to enter the market. The Indian Parliament gave its blessing to the policy, after contentious votes last week. Continue reading »
Ikea in India: No soup for you!
Ikea may have thought its long struggle to enter the Indian market was over. Having waited patiently for the government to push through a series of reforms aimed at opening up the country’s retail sector – to single brand stores at least – victory appeared at hand.
But, having got to the front of the line, the Swedish group appears to have run up against an unexpected foe: the meatball police. Continue reading »
Walmart’s India operations probed
Looks like Walmart’s emerging markets troubles are not limited to Mexico.
The FT reported on Thursday that the Indian government was investigating accusations that Walmart had secretly invested in local supermarkets, flouting a ban on foreign direct investment in the sector. Continue reading »
India: making it easier to buy land
India’s Congress-led government has been deeply divided within itself over how to overhaul the country’s antiquated land acquisition laws to overcome what is now one of the biggest bottlenecks for the country’s economy – the difficulties acquiring land for infrastructure and large-scale industrial projects.
The Congress has been trying to balance industry’s desire for a more efficient, effective process, with the rights and interests of farmers, who will lose their land to make way for industrial development. Continue reading »
India’s reforms: don’t stop now
Is India right to congratulate itself — as it often does — on its prudent banking regulation? Perhaps not, or at least not quite so frequently, according to Montek Singh Ahluwalia (pictured), one of the country’s most senior technocrats and a close friend of Prime Minister Manmohan Singh. Continue reading »
India reforms: S&P less impressed
After more than two years of policy paralysis, India’s Congress-led government has reignited a mood of optimism in India with a series of ‘big-bang’ reforms designed to send a message that India remains open for business and to reinvigorate the slowing economy. The rupee rebounded from historic lows against the dollar, and the Bombay Stock Exchange climbed upwards to highs not seen for more than one-and-a-half years.
But despite the sudden, dramatic shift in the public sentiment, credit rating agency Standard & Poor’s this week issued a timely reminder that India’s problems are far from solved. Continue reading »
India TV reform: FDI opportunities in digital switchover
Among the suite of reforms in foreign direct investment rolled out by New Delhi – including retail, aviation and pensions – there is one that has attracted less attention. India is raising the cap on foreign investment into broadcasting services from 49 per cent to 74 per cent.
The change is significant as the country is on the verge of a mandatory switchover from analogue cable television services to digital – and foreign investment is what the industry needs. Continue reading »
India’s diesel subsidy applies brake
It looks like India’s decision in mid-September to cut subsidies for diesel is starting to curb consumption of the fuel in the price-sensitive nation.
Growth in diesel consumption fell to 5 per cent in September, according to analysis by the Business Standard. That’s down from 10.4 per cent in August, 13 per cent in July and 13.7 per cent in June, according to data provided by the government’s Petroleum Planning & Analysis Cell. Continue reading »
Indian markets rise on reform promise
Indian markets hit their highest points in over a year on Thursday on reports that the government was set to enact reforms that would open up the pensions sector to foreign direct investment and raise a cap on foreign ownership in the insurance sector. Continue reading »
Indian insurance: opening up?
In the wake of the recent flood of reforms in India, Mumbai is awash with rumours that the government will next enact long-awaited liberalisation of insurance and raise the limit for foreign direct investment from 26 per cent to 49 per cent.
On Friday, shares in Max India, in which Mitsubishi Sumitomo owns a stake, spiked 6 per cent on reports of a policy move.
On Tuesday the insurance regulator told a conference he favoured reform. “Insurance, like many other sectors in India, requires greater levels of investments and in that regard we would welcome steps to increase FDI in the insurance industry,” said J Hari Narayan, chairman of the Insurance Regulatory and Development Authority. Continue reading »
India FDI retail: no e-commerce
With a few obstructions out of the way, as of Friday morning, foreign direct investment in multi-brand retail in India was made official policy. Walmart said that it expected to open its first store on the subcontinent in the next 18 months.
But one place you won’t find Walmart – or Tesco or Carrefour or any of the other retail giants expected to enter India now – is online. On Thursday, the government announced that foreign retailers would not be able to engage in e-commerce in India. Continue reading »
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