Weekly Commentary – Global companies are leaving India
Global investors decided to pull back their investment on India, foreign direct investment in India fell 21% by March 2013, according to the Ministry of Commerce and Industry. Those companies are across several industries, including retail, insurance and steel company etc.
A series of foreign company decided to leave India market, since they were disappointed that the India government public policy was blurred. The decision came while the India government announced to open up telecom to 100% foreign ownership and easing overseas-companies rules for defense, energy and single-brand retail. Although government try to make some changes, but there may be too little and too late. According to a Wal-Mart India spokeswoman, they have negotiated with India’s trade minister about the regulations governing investment in multibrand retail. However, there was no mention on government announcement.
India is still an attractive market for many foreign investors over long term for global investors, as its large population and growth potential. However, unclear public policy limited economic growth. In short term, investing in India is not an appropriate decision, unless there is turning point of the government try to improve their public policy.
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