FDI relaxation in single-brand retail- A welcome move

The government opening the floodgates for Foreign Direct Investment in single-brand retail, aviation and construction is a robust move towards injecting a new lease of life in the moribund Indian economy.

With growth limping, and employment generation slowing down, it was about time for the BJP government to adopt a course-correction. The three sectors that are up for grabs have, in the recent past, shown encouraging signs of revival.

These amendments are the government’s strategy to liberalise and simplify the FDI policy to facilitate ease of doing business and turn India into a global investment hotspot. In an integrated world, India will have to grow in tandem with other economies. And, the best way to tap into the huge reserves of international investments is to open up sectors that would yield handsome returns.

With a growing middle class population and a huge, hitherto-unexploited market, India is a lucrative destination for foreign investors.

During April-September, FDI inflows grew 17 per cent at $25.35 billion. In the financial year 2016-17, total FDI inflows hit an all-time high of $60.08 billion, as compared with $55.46 billion a year ago. With increased inflows of FDI, the government can aspire to carry out its disinvestment process.

However, Air India with its mounting debts will continue to be an albatross round the government’s neck. But one thing is certain: The Modi government’s reform credentials have got a new shine in the global market, in spite of domestic concerns regarding the move of inviting foreign players in the retail sector, which, according to observers, can put small traders out of business.