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India’s new financial reforms for FDI are a good move

Merit of resurgent consumerism, however, will lie in the ability to achieve a win-win for domestic and foreign players
Gulf News

The new malleability in India’s financial reforms for the foreign investment market needs to be largely welcomed. The long-simmering discontent over the world’s largest democracy not rising to its full potential as an attractive investment destination, given its enormous pulling power of consumer numbers, may now subside given the 100 per cent foreign direct investment (FDI) in single-brand retail, apart from a slew of other relaxations for multinational companies to trade in India.

The latest bundle of incentives — including the ones for the energy sector, airlines, construction and others — has expanded the footprint of open-market economics, boosting India’s appeal as an investment hub. Consumers, quite obviously, will be spoilt for choice, but their new-found delight is offset by the concerns of domestic manufacturers and traders. Experts’ analyses of the FDI’s impact in India so far has a lot going in its favour, including direct farmer incentivisation, improved technology, a more organised retail sector, better quality of goods, employment generation and a better distribution network and infrastructure, among other positives.

Heightening these advantages, undoubtedly endorsed by the pro-FDI economists, would be a government that is alert to the possibility of foreign monopoly thriving at the expense of the micro and macro domestic market, monitor aggressive pricing policies by multi national corporations and any potential skew in the economic graph not moving in the right direction due to inflation. It would also be prudent to keep a check on a skew in employment across the manufacturing and retail bandwidth.

Though FDI has every potential to provide India’s economy a substantial boost, the true merit of resurgent consumerism will lie in its ability to achieve a win-win situation for domestic and international players.

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