The Union Cabinet headed by Prime Minister Dr. Manmohan Singh on Friday decided to allow Foreign Direct Investment (FDI) in multi-brand retail, Single-brand retail and aviation sector as the government tries to revive the country’s tottering economic growth.
The government has decided to allow foreign airlines to buy stakes of up to 49 per cent in local carriers, heavy industries minister Praful Patel said on Friday, in a much-awaited policy move that provides a potential lifeline to the country’s debt-laden airlines by opening up a fresh source of funding.
The government has also decided to allow 100% Foreign Direct Investment (FDI) in Single-Brand Retail and 51% FDI in Multi-brand retail.
The move allows global firms such as Wal-Mart Stores to set up shop with a local partner and sell directly to consumers for the first time, which supporters say could transform India’s $450 billion retail market and tame inflation.
Prime Minister Singh was credited as the economist who opened up India’s economy in the 1990s, but since taking office eight years ago he has repeatedly put off or rolled back difficult economic decisions.
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