As no domestic business house may be ready to invest in debt-ridden Air India, permitting 49% foreign ownership in the airline may boost its prospects of survival.
Government's decision of allowing 100 % FDI for single brand retail has received criticism from the BJP's ideological mentor RSS.
WB projects 7.3% growth India's growth rate in 2018 is projected to hit 7.3 per cent and 7.5 per cent in the next two years, according to the World Bank, which said the country has "enormous growth potential" compared to other emerging economies with the implementation of comprehensive reforms.
The easing of rules for Air India would allow foreign airlines to buy a minority stake in a carrier with about 150 planes in its fleet, and bilateral landing and parking slots at lucrative airports from London to NY.
In turn, it will lead to larger FDI inflows contributing to growth of investment, income and employment, the government said in a statement. FIIs/FPIs will also be allowed to invest in Power Exchanges through primary market. Fast Retailing did not offer any immediate comment to the change in policy.
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However, FII/FPI (foreign portfolio investors) purchases were restricted to secondary market only.
This is the second major liberalisation in FDI policy by the NDA government in one go after major changes effected in June 2016. The amendment is likely to benefit companies such as Swedish furniture maker Ikea, which is planning to set up stores across the country.
"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", Rajat Wahi, Partner, Deloitte India said.
In a statement issued here on Thursday, CAIT National President BC Bhartia and Secretary General Praveen Khandelwal said that it will have vital bearing on livelihood of crores of small businesses in the country as the Government has taken the decision without considering its impact on India's existing retail trade. "We believe the decision to allow 100 per cent FDI through automatic route will ease the process for foreign as well domestic brands", Retailers Association said.