Reference: http://economictimes.indiatimes.com/articleshow/21598609.cms
Foreign retailers like Walmart, Tesco and Carrefour are unlikely to enter the supermarket business in India before 2014 general elections.
Reasons:
Political uncertainty:
Several political parties including the main opposition BJP and left parties are opposing the FDI policies for foreign retailers.
Praveen Khandelwal, secretary general, Confederation of All India Traders has accused the Government of working under pressure of global retailers like Walmart and Tesco.
The matter will be raised in the monsoon session of the parliament that begins August 5.
Multi-brand retail business requires quite a large investment, hence these retailers are waiting for clarity
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Revised norms:
Retailers would require to invest 50% in the back end only of the investment they bring for the first time. The minimum required investment is $100 million [nearly rs.600 Cr]
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According to Anis Chakravarty, senior director, Deloitte in India, there is confusion regarding the mandatory back end investment, whether it has to be green field or not.
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Reason for relaxation of FDI policy for several sectors like telecom and retail:
Foreign retailers like Walmart, Tesco and Carrefour are unlikely to enter the supermarket business in India before 2014 general elections.
Reasons:
Political uncertainty:
Several political parties including the main opposition BJP and left parties are opposing the FDI policies for foreign retailers.
Praveen Khandelwal, secretary general, Confederation of All India Traders has accused the Government of working under pressure of global retailers like Walmart and Tesco.
The matter will be raised in the monsoon session of the parliament that begins August 5.
Multi-brand retail business requires quite a large investment, hence these retailers are waiting for clarity
------------------------------------------------------------------------------------------------------
Revised norms:
Retailers would require to invest 50% in the back end only of the investment they bring for the first time. The minimum required investment is $100 million [nearly rs.600 Cr]
----------------------------------------------------------------------------------------------------------
According to Anis Chakravarty, senior director, Deloitte in India, there is confusion regarding the mandatory back end investment, whether it has to be green field or not.
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Reason for relaxation of FDI policy for several sectors like telecom and retail:
- boost inflow foreign money to revive the economy
- control current account deficit.
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What is current account deficit?
It is the difference between the country's total imports of goods, services and transfer and their exports.
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Current account deficit has touched to 4.8% of GDP in the financial year ended March 31, 2013.
Target for Government is to bring it down to 4.2% in the current financial year.
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What is GDP?
Gross domestic product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.
Components of GDP by expenditure
GDP (Y) is a sum of Consumption (C), Investment (I), Government Spending (G) and Net Exports (X – M).
Y = C + I + G + (X − M)
X (exports) represents gross exports.
M (imports) represents gross imports.
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Two major reasons for High current account deficit are:
1.Sluggish exports
2.sharp drop in FDI
The Foreign Direct Investment inflows to India declined to $22.42 billion in 2012-13 from $36.50 billion recorded in the previous year.
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