INDIA: Possible Changes to Foreign Investment Rules

Monday July 2 2012

Premier Manmohan Singh, the Indian Prime Minister who has assumed the finance portfolio, has spoken of the need to boost the Indian economy.

The prime minister has already signalled that India may stop aggressively taxing financial transactions, something that would restore tremendous foreign investor confidence in India.

It is also hoped that there will be revival of plans to allow foreign supermarkets, such as US giant Walmart, to own 51 per cent of Indian operations that could bring billions of dollars in investments. The government may also reportedly raise the foreign investment limit in the insurance sector to 49 per cent from the current 26 per cent to draw outside capital and support the rupee.

Other anticipated measures include simplification of land acquisition for industrial projects and permitting foreign airlines to buy up to 49 per cent of domestic airlines, which could help the cash-strapped aviation sector.

This information will be updated as more details become available