January 11th, 2012
05:07 AM GMT
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(CNN) – Nike, Starbucks and Ikea – the doors of India are now fully open to you.

Previously, under foreign direct investment (FDI) rules that limited single brand foreign ownership to 51%, foreign brands were required to partner with local investors.

Under the new rule passed by the government Tuesday, single-brand retailers like Marks & Spencer or Gucci  can own 100% of their operations in India, according to a circular released by the Department of Industrial Policy & Promotion.

The move was the latest in the political battle over whether to crack open Asia’s third largest economy to greater foreign investment.

In November, the government had planned to relax restrictions that prevent large, multi-brand foreign retailers like Wal-Mart, Tesco and Carrefour, but the plan was scrapped after a populist backlash against the plan (see above photo) amid fears small retailers would be muscled out of business.

Rajan Bharti Mittal, managing director of Bharti Enterprises – which has a joint venture with Wal-Mart for “cash-and-carry” wholesale stores that sell to businesses – told reporters “this is a welcome move with a clear potential to lift the general mood in the economy.

“Increased investments by foreign single brand retailers will not only help improve consumer choice but also enhance competitiveness of Indian enterprises through access to global designs, technologies and management practices,” Mittal said.

Thursday’s move comes a little more than a week after India announced plans to further liberalize its stock market to foreign investors. Starting January 15, individual foreign investors will be able to buy as much as 5% of a company’s shares. Total shares owned by foreigners, however, will not be able to exceed 10% of a company’s capital, the Finance Ministry said.

Before only institutional investors and Indians living abroad were allowed to invest directly in local companies.

The Sensex, India’s benchmark index, fell 25% last year, making the bourse one of the world’s worst performing markets in 2011. While among the world’s fastest growing economies, India’s breakneck growth slowed in 2010, slipping to 6.9% in the quarter ending in September – its lowest growth rate in more than two years.

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soundoff (34 Responses)
  1. thomas

    Welcome government's decision. Hope this will lead to more foreign retailers to enter our market.. Iam sure this will help indian economy .and further progress for the nation...

    January 11, 2012 at 5:46 am |
  2. wasso

    Really ? Fully open ? And when will that decision be reversed a la foreign hypermarket ? Next week ?

    January 11, 2012 at 5:47 am |
  3. mybit

    At long last. Its time India paves the way for the likes of Tesco etc. The local supermarkets in India are inefficient, disorganized, filthy (ie BIG Bazaar) and to put is simply CRAP when compared to the ones operating in the UAE etc. I hope the likes of Maya Lals, Choitrams, Spinneys, Geant, Carrefour etc enter the India market. LuLu – No thanks please.

    January 11, 2012 at 6:12 am |
  4. 蒋鹏

    these things already exist in China

    January 11, 2012 at 6:26 am |
  5. Choco monster

    So many Chinese braggarts..

    January 11, 2012 at 6:41 am |
  6. Jack

    Of course Western companies offer better services, since western countries are far more economically advanced. This is bad news for India as they will lose their cultural development and be held hostage to western commerce. Wealth will be extracted at a faster rate than any physical takeover of natural resources could have achieved.

    January 11, 2012 at 7:22 am |
  7. Ivan

    Great! That is all we needed is 1.2 billion more people drinking up coffee beans, soy milk, dairy and food wastage (bakery items, sandwiches) that Starbucks throws out on a daily basis that they cannot sell. Also more trash for landfill and ocean. Perhaps we can convince China too, a 1.4 billion society.. and then we can call it a day?

    Does everything have to go global? Can't Starbucks coffee just be happy with the profits it receives in the country where it was founded?

    January 11, 2012 at 7:44 am |
  8. Prashanth

    Don't think this is a great idea. True, that international products will be of high quality, but they won't reduce their prices for Indian economy. While an American, earning 8,000 dollars, can easily go for a product from an international brand costing five hundred dollars, but an Indian earning thousand dollars for the same job in India, might not be able to. Either these international companies must reduce their prices, (which won't work, cos then people from outside India would try to get these products for cheap from India), or Indians should be paid as much as Americans (for eg) to be able to afford them. People might say that nothing will change initially, but over the years, international companies will slowly increase their rates, pushing more Indians to poverty

    January 11, 2012 at 8:09 am |
  9. mybit

    The Indians must ensure that these MNC's strictly comply with the "No Chinese Products in India" policy. They are crap any way and should not be allowed to flood our market.

    January 11, 2012 at 8:39 am |
  10. Santhosh. G

    The fittest and best adapted will survive.

    January 11, 2012 at 9:18 am |
  11. Bruno

    I love Nike.

    January 11, 2012 at 9:56 am |
  12. Lukas

    India might finally catch up with the rest of the world......might. Good move to allow foreign companies to move in. Indians won't be held ransom to poor quality in the local market. It might also give local companies the catalyst they need to improve services. The Indian public will benefit. The locals will have to rise to the challenge.

    January 11, 2012 at 10:04 am |
  13. BoBo Chow

    How many shopping malls in India ?

    January 11, 2012 at 10:49 am |
  14. Rohit

    In some cases, the local markets offer better products. Customer service is a concern though. Ultimately, the rich who pay Rs100 for a coffee, would move from CCD to Starbucks. Nothing much changes for the majority of the people. Good for the economy and FDI numbers.

    January 11, 2012 at 12:40 pm |
  15. Tom

    India, be prepared to see two Starbucks every block, each facing one another lol

    January 11, 2012 at 1:23 pm |
  16. Beerbarrel

    Poor Indians. They are going to get ripped off soon. Sports shoes where the soles fall off after getting wet! Overpriced coffee with no service. Cheap skate overpriced furniture which they have to assemble themselves. The Indian politicians must be smoking dope.

    January 11, 2012 at 3:25 pm |
  17. Deepak

    Nike is already in India. Ikea may offer more options for furniture shopping in India.
    However, it may be hardtime for Starbucks. India has high quality coffee chains like Barista and CCD which have penetrated densely. Starbucks may find it hard to establish a base..

    January 11, 2012 at 3:35 pm |
  18. Julz

    India will laugh at Starbucks' version of Chai.

    January 11, 2012 at 4:08 pm |
  19. kanak

    BTW, Barista and CCD sucks in India, yes, they have penetrated heavily, but it is poor coffee. Starbucks is way better around the world. But I don't know if they can keep up the same quality in India. Every brand compromises on quality in India. I was not impressed with Costa either, but atleast it was drinkable.
    Ikea is such cheap furniture, I wonder what cheaper quality they will produce specially for Indian customers.
    India you can do better!! You don't need to join the brand race....Your people deserve better quality of life.

    January 11, 2012 at 11:13 pm |
  20. steve

    IKEA recently opened a store in Bangkok but it seems they forgot to stock it up, everything is out of stock. i think they underestimated the demand.

    January 11, 2012 at 11:58 pm |
  21. Prettygal

    There has to be more thought given to the small businessmen (and women) in India who need to make a living. The British plundered trillions of dollars (in today's numbers) of India's gold and treasure. Now the multinationals want to steal whats left. That Sonia G. is a foreigner anyway. I doubt she cares about real Indians. The idiots are the ones who vote for Congress I.

    January 12, 2012 at 12:16 am |
  22. Moharir

    Ikea, Starbucks, Nike etc. are necessities of the modern information age human beings. Indian midldle class too must strive to consume these necessities. Not consuming these necessities will put them behind the modern world and their lives will be full of darkness. They must not resist such laws as it will only make them look backward and fanatic. Manmohan Singh always does the right thing for India no matter howmuch Sonia Gandhi influences him. Also rightful expenditure on these necessities should not be termed as plundering by those companies.

    January 12, 2012 at 1:27 am |
  23. Beefburger

    It will be cheap to get stuff there at least, crappy Ikea furniture Made in China, and Nikes made by practically slave labor in South Korea.

    January 12, 2012 at 2:43 am |
  24. Shishir

    Well, I've heard of people talking about fresh and green vegetables available at Super-markets. That's nonsense. A local market (if you know where to shop for vegetables) sells better vegetables in India. The profit-seeking-don't-care-about-health-type-super-markets sell week old vegetables, which were under refrigeration for long! The hunt for profit in a, completely, unethical way, is what is twisting the world! but people will gather because its cheap, looks 'cool' (????) and in a certain way you define your social status! In the long run it will hurt local businesses unless the government can cap the investment limits and bring in 'strong' business protection policies for the benefit of everyone.

    January 12, 2012 at 8:10 am |
  25. Rudi Rebstein

    It's no wonder India will be the third largest economic force in the next 25 years. They are open minded and are prepared to manage risk.

    January 12, 2012 at 1:53 pm |
  26. 원서연

    I think this is a great idea. I thinkit's a great idea because the Indian people can get an opportunity to get high quality products from famous international companies. So why don't they do this thing?

    January 19, 2012 at 2:36 am |

    they aren't doing it because it's bad 원서연

    January 19, 2012 at 3:20 am |
  28. 강명진

    She's right. They will always have a plan.

    January 19, 2012 at 10:20 am |
  29. 오 규석

    cool, but I disagree

    January 21, 2012 at 12:53 am |
  30. eman

    View the fetus during birth


    January 27, 2012 at 1:41 am |
  31. Krish

    Lol... once you drink Indian caffeine, Starbucks is nothing, my friend. As for Ikea, that's a great idea. Nike's already in India, but I think it's a great idea to have them spread out a bit more. Business is welcome in India. =)

    February 4, 2012 at 5:03 pm |
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  33. Orlando doors

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    May 4, 2013 at 10:53 am |
  34. Darron Nunn

    Older IKEA stores are usually very large blue buildings with yellow accents (also Sweden's national colours) and few windows. They are often designed in a one-way layout, leading customers counter clockwise along what IKEA calls "the long natural way" designed to encourage the customer to see the store in its entirety (as opposed to a traditional retail store, which allows a customer to go directly to the section where the goods and services needed are displayed). However, there are often shortcuts to other parts of the showroom. Newer IKEA stores, like the one in Mönchengladbach, Germany, make more use of glass, both for aesthetics and functionality. Skylights are also now common in the self-serve warehouses; natural lighting reduces energy costs, improves worker morale and gives a better impression of the product.*,..*


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    May 20, 2013 at 5:57 am |

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