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First Step towards the Opening of Retail Markets-00-3501

By: Rakesh Toparticle4

In this context, motivates the aim of the paper. The third chapter, the need and importance have been treated; the fourth installment of the current trend of FII is discussed. It challenges the economic outlook for India’s response govt FII status of treatment of beneficiaries treated in later chapters and finally full debate.

The Government has approved sweeping reforms in the IDE with a first step towards the opening of retail markets, in part, to foreign investors. Now allowed 51 percent FDI in single brand products in retailing. Besides retail, other sectors are open:

* 100 percent is permitted in new sectors such as the grocery trade, processing and storage of coffee and rubber.

* of gas pipelines, infrastructure oil, mining captive coal and lignite.

* India, an investor may not dispose of the shares of an existing company to foreign investors.

* Limit of telecommunications services companies increased by 74 percent 49 percent

* Security (up to 26%), development of integrated townships (100%), defense industry (up 26%), tea plantations (up to 100% subject to sale of 26% in five years, investment FDI), improving the limits of FDI in the banking sector to 74%, allowing 100% FDI under automatic route for most manufacturing activities in SEZs, open B2B e-commerce , Internet service providers (ISP), not gateways, email and voicemail to issue 100% foreign investment to the condition of divestment of 26%, etc. The Department has also stepped up measures to facilitate investment through Investment Foreign Application Authority (FIIA).

* In addition, the government has extended some concessions specially for NRIs and foreign companies, representing more than 60% by NRIs

* Launch Open Industries reserved for the public sector to the private sector.

* The reduction of peak customs tariff of more than 300 per cent by the rate of 30 per cent tax, which applies to now.168 Research Journal of Finance and Economics - Issue 5 (2006)

* Severe restrictions on short-term debt and allowing external commercial loans based on the sustainability of external debt.

* Extensive financial sector reforms in banking, capital markets and insurance, including liberalization of interest rates, strong regulation and monitoring systems, and introduction of foreign / private sector competition. The relevant data appear in the table and graph on the following pages.

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