Just three months ago, this blog reflected the widespread public interest in Narendra Modi, now India’s prime minister. His Bharatiya Janata Party (BJP) swept to power in May’s general election with a majority that India hasn’t seen in three decades. It was seen as a presidential campaign, with the charismatic and controversial leader at the forefront of public debate.
Back then zealous optimism had commentators suggesting the former chief minister of Gujarat would do for the country what he did for the state and quickly turn around the beleaguered economy. Perhaps disappointment was inevitable – but is it fair? Continue reading »
Last year the Indian government eased the rules on FDI into single-brand retail, allowing 100 per cent foreign ownership. Yet Villeroy & Boch, the German-owned porcelain manufacturer, has chosen to come to India in a joint venture with a local partner.
It raises questions about the policy reform and whether foreign stores will set up alone in India – even if they are now allowed to. Continue reading »
The World Bank slashed its growth forecast for India on Thursday, predicting GDP for the current fiscal year at 4.7 per cent.
Back in April, the Bank was predicting economic growth of 6.1 per cent in the current fiscal year – but a lot has happened since April. Continue reading »
Commentators have a long list of gripes with Indian policy makers: paralysing land laws; mixed messages on foreign direct investment; and labour laws that make barriers of exit into barriers of entry. Clearly structural reforms are needed to kickstart Asia’s third largest economy.
With elections due next year, the hope is that this is just pause mode, and a change in policy will come with a change in government. So let’s use a little history to see what we can expect in the run up to the election, with the help of a new report from Société Générale. Continue reading »
Bodoland on the map?
For the last two years, India’s Congress-led government been struggling to push important economic reforms through Parliament in the face of the Hindu nationalist Bharatiya Janata Party’s tactic of determinedly disrupting the proceedings to protest against alleged corruption and other misdeeds.
But with India’s economy faltering, and the rupee hovering near lifetime lows, it was hoped that the current monsoon session of Parliament might finally get down to important legislative business that could help restore investor confidence in India’s government, economy and currency. Fat chance. Continue reading »
Yet another glitch in the Indian government’s attempt to attract foreign direct investment.
Walmart, the world’s biggest retailer, has said it will not be able to use local suppliers for 30 per cent of its sourcing, one of the conditions on FDI in multi-brand retailing in India. Continue reading »
First Posco, now Mittal. It’s not looking good for Indian FDI.
ArcelorMittal, the global steel company, said on Wednesday it was pulling out of a planned investment in Keonjhar, in the Indian state of Odisha, because of third-party delays and the bleak economic outlook. The news came a day after Posco, the South Korean steelmaker, said it was dropping plans to build a $5.3bn steel mill in Karnataka after long-running issues on land acquisition. Continue reading »
Still safe from Walmart
Last year, the Indian government loudly opened up the multi-brand retailing industry, allowing foreign investors to hold up to 51 per cent in companies.
But the euphoria was short-lived. Very soon, it emerged that states would approve the reforms individually and the policy would have to go before India’s very stroppy parliament.
Now, the government has begun clarifying the rules – and, for foreign investors, things look every more difficult. Continue reading »
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 »
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 »
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 »
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 »
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 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 »