As India’s primary equity markets continue to suffer amid wider market jitters, market participants are preparing for a regulatory shift in focus in 2012 from domestic to foreign investment.
Kotak Mahindra Capital’s Ajay Vaidya says a poorly performing global economy and slowing foreign investment in the region would fast-track a long-discussed, second wave of reforms in the country.
“An opening up of the country’s insurance, airline, retail and financial markets have been discussed for some time as viable inducements to enhance foreign investment in India,” he says. “The time has now come for authorities to put those discussions into action.”
Already, India’s government has announced plans to allow majority foreign ownership of supermarket chains and outright foreign control of single-brand retail companies. The new rules would pave the way for the expansion of groups like Ikea, Walmart and Carrefour...