Foreign Direct Investments in India [Infographic]

On September 14 , Manmohan Singh, the Prime Minster of India, initiated a slew of reforms for the Indian Economy such as allowing FDI in retail, fuel price hikes etc. Previously, to be able to get foreign funding, products sold by a firm to the general public needed to be of a 'single-brand' and 51% investment in a single-brand retail outlet was permitted. FDI in multi-brand retailing was prohibited in India. It is expected that now foreign supermarkets, like Walmart, Carrefour and Tesco, will operate in India.

Supermarkets may cut out the long chains of middlemen.Restrictions on “single brand” foreign investors, such as IKEA, Nike, and Apple are being relaxed—foreigners can now own such outlets outright, without needing local partners. To raise funds, too, the government plans a slew of privatisation, selling off government-owned chunks of equity in Hindustan Copper, in Oil India, and other firms. For long the government has long kept fuel price artificially low through subsidy. But as market prices have soared, the subsidy bill has exploded, helping to turn a bad fiscal situation into a dreadful one.

The government will now let foreigners invest more in India’s power sector (“trading exchanges”), in domestic broadcasting, and in domestic aviation. Prime Minister,Mr. Singh, was credited as the economist who opened up India's economy in the 1990s. Let us hope for the best!