India Backs Foreign Investment in Retailing

India Backs Foreign Investment in Retailing.

1. Introduction

Today we would like to talk about BRIC’s countries. Each of us will present one of these 4 countries.

First of all I would like to say a few words about the BRIC signification.

BRIC is an acronym standing for Brazil, Russia, India and China. These are the leading "emerging markets."  The combined population of the 4 countries is approximately 2.8 billion, or about 40% of the people on the planet.  
According to Forbes, "The general consensus is that the term was first prominently used in a Goldman Sachs report from 2003, which speculated that by 2050 these four economies would be wealthier than most of the current major economic powers."

In March 2012, South Africa appeared to join BRIC, which thus became BRICS.

I would like to present you India. Which is one of the BRIC’s countries. For this presentation I chose the article: India Backs Foreign Investment in Retailing. This article was published in the NY Times (démocrate) on September 14 this year.

2. L’analyse médiatique.

India's economy has been hurt by a variety of factors in recent months. Slowing global demand has affected the country's exports and dented industrial production. And Indian government in order to stop India’s slowdown in economic growth decided to pass some economic reforms which allow to the big foreign retailers like Walmart, foreign broadcasters and foreign airlines to invest in the country.

The Prime Minister, Manmohan Singh in his speech declared the next: “The time for big-bang reforms has come and if we go down, we will go down fighting.” He is estimate that attraction of foreign investment in the country will boost employment and improve country’s infrastructure.

But the controversy of these reforms inside of the Indian’s government exists. Country’s leading opposition, the Bharatiya Janata Party is totally opposed to these reforms they declare “that it was a very cheap attempt to divert attention from the recent Coal scandal”

At the same time Chandrajit Banerjee, the director general of the Confederation of Indian Industry, said that these measures will boost industrial sectors in India, which country needs and it would also improve the current account deficit situation, which was becoming alarming.

India’s retail sector is dominated by small shops, and its wholesale distribution networks are disastrously inefficient. More than a third of the fruit and vegetables grown in India rot or perish between farms and stores, increasing alarming situation in the country. Anand Sharma, India’s commerce minister said in a news conference that foreign retailers would bring vital investments in such areas as refrigerated trucks and modern sorting and processing facilities.

Foreigners would be allowed to own up to 49 percent of exchanges for trading electric power, and foreigners would be allowed to own up to 74 percent of broadcast services like TV channels under the new policies.

The government also announced that it would sell 10 percent of its stake in Oil India, 12.5 percent of its stake in the aluminum maker Nalco, 9.59 percent of its stake in Hindustan Copper and 9.33 percent of the Metals and Minerals Trading Corporation of India, a crucial source of foreign exchange in India.

So the plan is widely welcomed by most economists and big-business executives.

     II. Why I choose this article.

I found this article very informative, which shows as an actual situation in one of the emerging countries. We noticed in past years that these emerging countries are growing up in term of economy, but today is not so evident, the growth is slowing down.

3. Own Opinion

I think that Indian government needs to take action to improve the investment climate in India if the country want to maintain a high rate of growth in the future.

The attracting of foreign investors in the country will bring immense benefits starting from farmers to small manufacturers and also for the consumers.

Enhanced investment in the sector can further the cause of employment, particularly amongst youth. In addition, this decision will open the doors for much needed technology and investments to develop the entire retail ecosystem in the country.