The opening of India may benefit a lot of companies, including tech companies coming in from the West. And that roster features one very large firm bearing a fruit imprimatur.
Reuters reported on Monday (June 20) that India is introducing “sweeping reforms” that span the nation and will let foreign investment in the nation increase significantly, a move that will let Apple open stores. At the same time, another broad swath of industries will benefit, with old-line niches in, say, aviation and pharmaceuticals, noted the newswire.
The opening of the borders, so to speak, comes only a few days after Raghuram Rajan, the central bank’s governor, who was referred to by some in the financial press as having a “rock star” status, said he would decline to seek another term. That led to some questions about at least some reforms he was seeking. Some observers commented to the newswire that the opening of foreign direct investment parameters would mean that the government was indeed committing to at least some methods of change. Prime Minister Narendra Modi stated that the changes to FDI, as such investment is known via shorthand, would make India the “most open economy in the world for FDI” and provide momentum behind both “employment and job creation.” Critics in the past have noted that the country has ranked 130th in the World Bank’s Ease of Doing Business Index, with a reputation for red tape and tough tax hurdles.
The rules would let “single-brand” retailers, such as Apple, have some respite from previous mandates that at least 30 percent of goods sold in the country be sourced locally. The firm now has three years to meet that threshold and then could benefit from a five-year extension if its tech were to be deemed “state-of-the-art” and “cutting-edge.”