Opening the doors for FDI will make India attractive to foreign investors again
Maybe we should give Chidambaram a break. Opening up of FDI was the much needed breather that India's dying telecom sector needed and has been vying for a while now. Will the move not entice foreign multinationals to start looking at investing in India more favourably now that they will have more control over their operations and allow loss-making Indian units an exit option?
All global fund managers and foreign MNCs are time and again quoted by Business TV channels as saying India is too big a market to ignore right now- be it auto, telecom or retail- despite its regulatory hurdles. Already in the retail space, a ton of companies have lined up to open India stores and even though the approvals may take long, there has not been any pause in their India investment plans yet.
So even though we may not see a rush of fresh new investment, it is definitely a sentiment booster and should lead to some confidence building among investors as a shift away from too much dependence on hot money to long-term foreign funding is the right way to finance that bulging current account deficit.
I strongly disagree. For one, a sudden spurt of reform announcements is not going to bring about sea change overnight, as long as the ground situation in the country as far as policy remains the same.
Implementation is what matters more than announcements. If the government wants to bring about the change, it has to first address the bottlenecks in the policy making process. Moreover, it is to be remembered that these are just proposals. A step like increasing the FDI cap in insurance even needs Parliamentary approval. So nothing changes on the ground. It is again wait and watch, while the markets get some thing to rejoice on.
Only one Question. Why did POSCO walk out of Karnataka Project?