US media hails Indian govt's FDI reforms

Last Updated: Sat, Sep 15, 2012 18:10 hrs

Top US dailies have hailed Prime Minister Manmohan Singh and his United Progressive Alliance (UPA) government for allowing Foreign Direct Investment (FDI) in muti-brand retail.

The Washington Post had earlier this month called Singh as ineffectual and a dithering politician.

The highly revered newspaper, however, describes UPA government´s decision on FDI as ´biggest and arguably toughest economic reforms since Prime Minister Manmohan Singh took over in 2004´.

"The changes open the door to foreign investment in retail, aviation, broadcast and power exchanges and are the biggest and arguably toughest economic reforms since Prime Minister Manmohan Singh took over in 2004," it said.

"After being on the defensive for two years over slowing economic growth, high inflation and growing corruption scandals, India's coalition government finally appeared determined to make tough decisions this week," the newspaper said.

The Wall Street Journal said: "India approved a series of sweeping economic overhauls, including a plan to allow investments by foreign big-box retailers for the first time, in a dramatic push to reverse the nation´s economic decline and boost capital flows from overseas."

"Resistance to the measures is likely to be fierce, and even if they stick, foreign investment won´t necessarily flood in. Still, the steps have the potential to open the door significantly wider for foreign companies looking to capitalize on India´s vast consumer market," it said.

The New York Times described the decision as the ´biggest economic reforms in two decades´.

"The central government, led by the Congress Party, is under heavy pressure to kick-start India's slowing economy, boost employment and improve the country's shambolic infrastructure. Bringing in big foreign brands, like Walmart which can now open stores in India in partnership with a local company, is expected to help," it said.

The Union Cabinet on Friday approved 51% FDI in single-brand product retail trading after amending certain conditions in the policy.

"The Cabinet has approved the proposal of the Department of Industrial Policy & Promotion for amendment of the existing policy on Foreign Direct Investment in Single-Brand Product Retail Trading," read an official statement.

The government had permitted FDI, up to 100%, in single brand product retail trading, subject to specified conditions

The Cabinet Committee on Economic Affairs also relaxed rules for FDI in the aviation sector, allowing international airlines to invest upto 49 percent in domestic airline firms.

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