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World

India relaxes rules on foreign investment

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World

India relaxes rules on foreign investment

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COMING UP:India relaxes rules on foreign investment

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00:00:02
>> Flinging open the doors to one of the world's fastest growing economies. India announcing this week it's easing rules on overseas businesses setting up shop, allowing more foreign direct investment in a country notorious for protecting local firms. However, as Reuters' Douglas Busvine reports, it's convenient timing for Prime Minister Narendra Modi.
00:00:23
This announcement comes days after India's celebrated Central Bank governor Roghuram Rajan shocked financial investors by announcing he would not make himself available for another term. Last year, after Modi's ruling political party suffered a really serious setback in a state election, he also rolled out FDI reforms. This is a similar exercise.
00:00:45
You could say it's damaged limitation, an attempt to basically change the subject. The rules will be good news for big brands like Ikea or Apple, which could open up their first Indian stores. Remember that CEO, Tim Cook, was in India recently. He wants to build up Apple's sales in India as the markets in China and the United States slow.
00:01:07
Local content norms which require retailers to sell 30% of their goods made in India, these are being waived for a three-year period. And Apple, if it can demonstrate that it's products are cutting-edge, would get another five years grace. That's eight years. I think we probably can expect Apple to be opening retail stores in India pretty soon.
00:01:31
>> Critics say many of the new rules don't open up some industries like domestic airlines or they're just unclear. And haven't cut away enough of India's infamous red tape.