Key features and implication of the government’s Friday decision of allowing Foreign Direct Investment (FDI) in multi-brand retail and aviation sectors.
FDI in multi-brand retail
- 51 percent FDI allowed in multi-brand retail
- States given discretionary powers of opting for it or not
- Government expects to generate funds, jobs and stimulus for economy
- Government also expects to tame inflation from the move
- Farmers expected to get healthy returns for produce
- Less agriculture wastage due to the decision
- Consumer to benefit with more choices and competitive prices
- Foreign brands like Wal-Mart, Tesco and Carrefour eying to enter India
- $450 billion retail market in India
FDI in single-brand retail
- 100 percent single brand FDI allowed
- 30 percent local sourcing mandatory
FDI in aviation
- Foreign carriers can now pick up 49 percent stake in India airlines
- Airlines like Kingfisher and SpiceJet keen on foreign funds
- With India one of the fastest growing aviation markets in the world, airlines can gain international technical assistance and expertise
- Transactions will be governed by SEBI norms
- Key positions in the airline will be held by Indian citizens
- Foreign nationals and equipment under the stake sale will be scrutinised
- Total FDI in air transport sector from 2000-2012 at $434.75 million
FDI in broadcast
- Government decides to raise FDI cap to 74 percent
- FDI not hiked in TV news channels and FM radio
- Decision to benefit consumers with more choices and competitive pricing
- FDI also allowed in Mobile TV