All You Need To Know About the Updated FDI Policy and Its Impact
Recently, the Cabinet has brought about a change in the existing FDI policy on single-brand retail trading. Now as per the new policy, under the automatic route, foreign players can have 49 percent stake and FDI beyond 49 percent, while through government approval route, they can have stakes and FDI up to 100 percent. There were mixed reactions by the experts on the approval of Union cabinet on 100 percent Foreign Direct Investment in single-brand retail. Some traders’ bodies were not happy with this decision of the government as they believed that this is a serious matter for small businesses.
As per some analysts, this is another positive step from the government towards ease of doing business in India. With the help of this new policy, foreign entrants will find it easier to set up operations in the country. But there were few people, who strongly opposed this decision of the government. They believed that this step of government will affect smaller businesses by paving way for the foreign brands to dominate the country’s retail trade.
Why is the new FDI policy not in favor?
This move of government will facilitate easy entry of multinational corporations in retail trade of India. The move will also violate the poll promise of BJP. The Confederation of All India Traders believed that the government is more interested in paving way for the MNCs to control and dominate the retail trade of India instead of formulating policies for the welfare, up gradation and modernization of existing retail trade. The experts opposing this decision of creating a new policy think that such a step will result in a large number of jobless people. Due to this large number of people will lose jobs.
Why is the new FDI policy in favor?
In spite of so many people opposing this move, there are people who are strongly in favor of it. The region tax leader of India also believes that the move will give the Indian consumers access to several international brands.
By allowing 100 percent FDI in single brand retail under the automatic route is progressive step by the Government of India towards attracting foreign investment and ease of doing business in India. It will not only generate employment but also give the Indian consumers access to several international brands.
Some experts have faith in government decision and believed that the global brands across different categories, from apparel to electronics to accessories will be aided through this, providing further options to Indian consumers and improving India’s ranking in ease of doing business.