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India opens part of retail sector to foreign stores | India opens part of retail sector to foreign stores |
(about 4 hours later) | |
The Indian government has allowed single-brand foreign retailers to open stores, clearing the way for companies such as Starbucks and Ikea. | |
Retailers can now invest beyond the previous limit of 51% ownership. | Retailers can now invest beyond the previous limit of 51% ownership. |
However, they are required to buy 30% of their goods from domestic small industries. | However, they are required to buy 30% of their goods from domestic small industries. |
The move is a step forward after plans to open up the lucrative supermarket, or multi-brand sector, were delayed following a political outcry. | |
The cabinet approved the plan to allow wholly foreign-owned "single brand stores" in December. A government notification was issued late Tuesday announcing its implementation. | |
Large domestic retailers were happy with the agreement, which was pushed through by the government on Tuesday. | Large domestic retailers were happy with the agreement, which was pushed through by the government on Tuesday. |
"This is a welcome move with a clear potential to lift the general mood in the economy," said Rajan Bharti Mittal, managing director of Bharti Enterprises which partners with Wal-Mart supermarkets. | |
Previous attempts to open up the retail sector have met with mass protests in the country and within the government. | Previous attempts to open up the retail sector have met with mass protests in the country and within the government. |
Prime Minister Manmohan Singh reversed a decision in December to let multi-brand companies such as Wal-Mart and Carrefour to open supermarkets in India. | Prime Minister Manmohan Singh reversed a decision in December to let multi-brand companies such as Wal-Mart and Carrefour to open supermarkets in India. |
Those against the move said it would hurt small local businesses. | Those against the move said it would hurt small local businesses. |
Mr Singh has said he will renew the attempt to open up the sector after regional elections in 2012. | Mr Singh has said he will renew the attempt to open up the sector after regional elections in 2012. |
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