India moved to relax restrictions on foreign investment in retail, airlines and other industries Wednesday, in hopes of attracting more capital and expertise to Asia's third-largest economy.
Prime Minister Narendra Modi's cabinet approved a proposal to allow foreign airlines to take up to a 49% stake in national carrier Air India, which New Delhi wants to privatize. Foreign airlines are already allowed to own up to 49% of private airlines in India but were restricted from investing in the state-run carrier, which has been a drain on the country's coffers for years.
New Delhi is also looking to trigger more international interest in building retail outlets and supply chains in the country by loosening local sourcing requirements.
Any single-brand retailer--which sell only their own products, such as IKEA or H&M--that opens stores in India has to buy at least 30% of the goods sold from Indian small and medium-size companies.
Retailers have complained that was an impossible hurdle to overcome as India doesn't have the product manufacturers they need to fill their shelves.
The cabinet has accepted a proposal that allows single-brand retailers sourcing from India for their global operations to count some of those exports toward the 30% local sourcing requirement for their India business for five years.
The latest steps come as top Indian lawmakers, including Mr. Modi, are set to leave for the World Economic Forum in Davos, Switzerland, and are struggling with an economic slowdown and concerns that they won't be able to fulfill their promises to provide more jobs.
Since taking office in May 2014, Mr. Modi has eased foreign-investment rules. India received around $60 billion in foreign direct investment--its highest ever--in the fiscal year ended last March.
Write to Rajesh Roy at email@example.com
(END) Dow Jones Newswires
January 10, 2018 06:48 ET (11:48 GMT)