India Likely to Remove Restrictions for Global Investors in Retail
Published By : 05 Jun 2014 | Published By : QYRESEARCH
Starting July 2014, global online retailers could be allowed to sell their own products in India. The country is said to be on the verge of a decision to remove restrictions that have hitherto inhibited competition in its massive price-sensitive retail sector. According those close to the discussions, the decision could be announced in the forthcoming budget. If it comes through, this could be one of the early tangible signs of the country’s new Prime Minister Narendra Modi bringing in business-friendly economic reforms.
With this move, the government could open up the country’s USD 500 billion retail sector, allowing global retail behemoths such as Wal-Mart Stores Inc to enter this opportunity-laden market.
News agency Reuters cited credible sources who opined that a stronger online retail market in India would provide a further impetus to the consumption and manufacturing sector in India. Ultimately, this could prove important to an economy that’s trying to improve its growth figures that have remained lower than 5% for the past two years-the longest below-par expansion figures since the 1980s.
Quoting a senior government official who did not wish to be named, Reuters reported that most stakeholders are in favor of foreign direct investment (FDI), even pitching for completely opening up the sector. Experts in the industry say that e-commerce-that stands at 1% of the country’s economy now-could reach 4% by 2020.
Reports suggest that this proposal was put forward to India’s new prime minister during a meeting with top bureaucrats. Talks of opening up the sector have been going on since last year, and a decision seems imminent now.
U.S. President Barack Obama recently said that the world’s largest economy plans to quintuple bilateral trade with India taking it to USD 500 billion or more, with a special focus on sectors such as defense, retail, energy, and drugs.