'Liberalisation in retail FDI to be delayed'
Sunil Bharti Mittal, president of the CII, stresses that the areas where India retained barriers to foreign investment could be 'counted on one hand', reports Pramit Pal Chaudhari.Updated: Jun 05, 2007, 23:18 IST
US business should understand "political realities" in India and not expect the insurance and multi-brand retail markets to open up to foreign investment "for some years," said Sunil Bharti Mittal, president of the Confederation of Indian Industy and chairman of Bharti Enterprises. He said financial services would likely see further liberalisation by 2009-10.
Speaking at the Asia Society in New York, Mittal stressed that the areas where India retained barriers to foreign investment could be "counted on one hand." There were few if any restrictions on foreign direct investment in sectors ranging from armaments to telecommunications to agriculture.
"India is open for business," he stressed to an audience of US business and financial firms.
Indicating that opening up of retail and insurance to foreign investment was only a matter of time, Mittal noted how his retail partner Wal-Mart was setting up logistics structures and cash-and-carry shops in preparation. Luxury retail firms like Louis Vuitton were also active in India.
Mittal admitted that while Indo-US economic relations were better than ever, given the size of the two economies they were still "not big enough."
The CII had calculated that by 2025, the US would short of 25 million workers and similar shortages would afflict Japan and Europe. "I supsect most of these minds and hands will come from India," he said, citing the greater "acceptability" of Indian skill sets and democratic culture.
Answering questions about Manmohan Singh’s recent call for business to be play a greater role in boosting the social sector, Mittal said, "The prime minister’s message was not that government is failing, but that it needs help."
However, he noted that the Indian finance minister had admitted that already 80 per cent of the government’s increased spending on the social sector already comes from taxes on the corporate sector. "It is too early," said Mittal. "Five to seven years of success is not enough time for Indian business to be able to invest heavily in the social sector."