FDI in retail: An idea whose time has come

Our policy stance towards foreign capital has been easing ever so gradually since India opened up to the world in 1991. This despite the fact that we save less than we invest and import more than we export. These two gaps, adding up to nearly 6% of the gross domestic product, have per force to be bridged by money from abroad. India dips into a $1.5 trillion pool of global foreign direct investment (FDI) and has managed to draw in $132 billion since 2000. By comparison FDI flows into China clocked $105 billion in 2010 alone. A thicket of government restrictions has been damping the ardour of multinationals wanting to enter the second fastest-growing emerging economy.

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