Opening Up The Economy…In India

India continues to take the necessary step to integrate into the global economy.  The latest move is liberalization of the retail market to allow foreign investors to open their own retail outlets.  Although not all restrictions are being lifted at this point and some pre-conditions remain in place (the major one being that only single brand foreign companies/retailers will be allowed to open their own stores)…

Nevertheless, the Indian government is determined to press ahead with the reforms which it says will create jobs, while giving sufficient protection to Indian businesses.

Experts believe that retailers such as Nike, Reebok and Marks & Spencer could take advantage of the changes to step up their investment in India, the world’s eighth largest retail market.

Certainly, there are critics of the move, who say that liberalization will hurt local retail outlets and consumers.  But many business people are excited about the new opportunities.

Indian retailers and industry bodies Wednesday welcomed the government’s move to allow foreign brands to open stores, saying it will help develop infrastructure in the estimated $300-billion retail market and increase tie-ups between local and overseas companies.

“It’s a fantastic step…it will expand the whole market,” said Nikhil Chaturvedi, managing director of Provogue (India) Ltd. (532647.BY), a leading manufacturer of ready-made branded clothing. Chaturvedi said he will look for partnerships with international brands who want to sell their products in India. “This will give more choice to customers…it will expand the market,” he said.

It is uplifting to see the country moving towards free markets and open trade rather than protectionism.  I am sure consumers will appreciate a wider selection of goods – especially given the fact that growth in the demand for consumer goods and services has been quite strong in India.

Published Date: January 25, 2006