Hike in retail FDI
The central government is all set to raise the limit of foreign direct investment in the retail industry in India. The Department of Industrial Policy and Promotion (DIPP) has moved a cabinet note to the proposal to increase the limit of foreign direct investment in single brand retail from 50% to 100%. DIPP was earlier in favour of upping the limit to 74% but later took an aggressive stand to allow complete ownership of a company by a foreign player in single brand retail. DIPP is of the view that if foreign luxury brands like Louis Vuitton of France and Swedish furnishing house Ikea are allowed to open more stores in the country, they will look to source their products locally due to the ramp-up in their scale of operations. Similarly, for multi-brand retail, the proposal is to allow 51% foreign direct investment. The move has come in a time when the government is trying hard to push through the proposal to allow more liberal foreign direct investment in multi-brand retail, which will allow big players like Walmart, Carrefour, Tesco, etc., to enter the Indian market and will help the government to shore up declining foreign direct investment.
No more good times
The flamboyant Vijay Mallya-led Kingfisher Airways is in a hot soup these days. After cancellation of over 200 flights in recent weeks due to oil companies’ stopping supplies because of non payment of their dues, it has received a show cause notice from the Director General of Civil Aviation. As on date, Kingfisher is due to clear a bill of around Rs.13 million to Hindustan Petroleum. It was the second time this year that the oil marketing companies stopped supply of aviation fuel to Kingfisher pending the clearance of huge dues. Besides, Kingfisher is also finding it difficult to service its Rs.6 billion in debt that it has taken at a high cost. The airline is in talks with the lenders for a debt restructuring plan. Presently over 23% of Kingfisher’s stake is owned by a consortium of 13 banks, including SBI, ICICI Bank, IDBI Bank, Bank of Baroda and Punjab National Bank.
The central government is all set to raise the limit of foreign direct investment in the retail industry in India. The Department of Industrial Policy and Promotion (DIPP) has moved a cabinet note to the proposal to increase the limit of foreign direct investment in single brand retail from 50% to 100%. DIPP was earlier in favour of upping the limit to 74% but later took an aggressive stand to allow complete ownership of a company by a foreign player in single brand retail. DIPP is of the view that if foreign luxury brands like Louis Vuitton of France and Swedish furnishing house Ikea are allowed to open more stores in the country, they will look to source their products locally due to the ramp-up in their scale of operations. Similarly, for multi-brand retail, the proposal is to allow 51% foreign direct investment. The move has come in a time when the government is trying hard to push through the proposal to allow more liberal foreign direct investment in multi-brand retail, which will allow big players like Walmart, Carrefour, Tesco, etc., to enter the Indian market and will help the government to shore up declining foreign direct investment.
No more good times
The flamboyant Vijay Mallya-led Kingfisher Airways is in a hot soup these days. After cancellation of over 200 flights in recent weeks due to oil companies’ stopping supplies because of non payment of their dues, it has received a show cause notice from the Director General of Civil Aviation. As on date, Kingfisher is due to clear a bill of around Rs.13 million to Hindustan Petroleum. It was the second time this year that the oil marketing companies stopped supply of aviation fuel to Kingfisher pending the clearance of huge dues. Besides, Kingfisher is also finding it difficult to service its Rs.6 billion in debt that it has taken at a high cost. The airline is in talks with the lenders for a debt restructuring plan. Presently over 23% of Kingfisher’s stake is owned by a consortium of 13 banks, including SBI, ICICI Bank, IDBI Bank, Bank of Baroda and Punjab National Bank.
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