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December 8, 2012

Why India’s FDI Fight Is Far from Over?

Filed under: Uncategorized — vikkykyt @ 12:49 pm

India’s beleaguered coalition government won a major battle today, prevailing in two key votes in the nation’s Parliament that will allow foreign multibrand retailers like Walmart and Tesco to open shop in the country. The move to allow 51% foreign investment in multibrand retail stores helped end a two-year-long period of so-called policy paralysis when it was first announced in September but soon ran into trouble when then coalition partner Trinamool Congress (TMC) pulled out of the government to protest the measure. The opposition Bharatiya Janata Party (BJP), meanwhile, has been angling for a vote on the FDI issue for months.

The final stamp of approval from both the upper and lower houses this week is a big win for the United Progressive Alliance (UPA) government, which has been trying to get India’s lagging economy back on track. Anticipation of the government’s win pushed India’s stock market to a 19-month high on Wednesday. The ruling will be a boon for Prime Minister Manmohan Singh, who pushed the measure through in the face of strong opposition from allies, and it could help clear the way for more broader economic liberalization.

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