UK-India Business Council asks Indian government to revise FDI regulations

By

Isabelle Crossley

Published
Jun 17, 2019

The UK-India Business Council has asked Narendra Modi’s newly re-elected government to revise its foreign direct investment regulations to allow for more investments from foreign businesses.

Arguing that easing FDI regulations for multi-brand retail in India will bring more foreign investment to the country, the UKIBC requested a revision of the FDI policy regarding necessary investment in logistics and back-end infrastructure. The US government and several large businesses such as Walmart have also questioned the FDI regulations. 

The FDI policy currently permits foreign investment in multi-brand retail with up to 51 percent business ownership allowed. Investors must also source a percentage of goods from micro, small, and medium enterprises and invest in back-end operations in India. 

"The initial announcements on multi-brand retail were a step in the right direction,” the UKIBC Group’s CEO Richard Heald told the Press Trust of India in an interview. “Obviously, politically they were circumscribed by conditionalities and to be frank, we have not seen a huge number of companies, if any, in multi-brand retail… So we would like to see a revisiting of these FDI norms and also the conditionality that's wrapped around it.”

Heald also opined that encouraging more foreign investment in India would benefit the country’s rural economy. However, groups such as the Confederation of All India Traders, which advocates for small businesses in the country, has protested against more foreign businesses launching in India and believe that they harm smaller Indian business interests.