India liberalizes foreign direct investment to boost economy

Business

In this Jan. 6, 2011 file photo, a young woman stumbles as she tries to carry a large basket of coal as they illegally scavenge at an open-cast mine in the village of Bokapahari in the eastern Indian state of Jharkhand where a community of coal scavengers live and work. India has decided to liberalize foreign direct investment in domestic manufacturing, coal mining and digital media and will also allow single-brand retailers to start online sales to infuse capital into the country and boost its economy. (AP Photo/Kevin Frayer, File)

NEW DELHI (AP) — India decided Wednesday to liberalize foreign direct investment in domestic manufacturing, coal mining and digital media, and also allow single-brand retailers to start online sales to infuse capital into the country and boost its economy.

Commerce and Industry Minister Piyush Goyal said the Cabinet approved 100% foreign direct investment in coal mining and associated infrastructure. He said it also approved 100% foreign investment in contract manufacturing and up to 26% investment in digital media.

The government made the decision as it grappled with a slowing of economic growth to a five-year low of 5.8% in the January-March quarter, with consumer spending and corporate investment faltering. Declining industrial output and automobile sales also raised fears of a deeper slowdown.

The government also relaxed the 30% local sourcing requirement in single-brand retailing and permitted online sales without the prior opening of brick-and-mortar stores.

“Online sales will lead to the creation of jobs in logistics, digital payments, customer care, training and product skilling,” Goyal said.

The decision may come as a relief for multinational companies like Apple which are facing tough times in the Indian smartphone market because of stiff competition from Chinese makers.

“The changes in foreign direct investment policy will result in making India a more attractive FDI destination, leading to the benefits of increased investment, employment and growth,” Goyal said.

Last week, the government rolled back a surcharge on foreign portfolio investment and announced steps to lower interest rates on home and auto loans to shore up the economy.

Rajiv Kumar, chairman of the government-run Policy Commission, called for immediate steps by the government to tackle poor liquidity and weak private investment. He warned that India has not faced this kind of a situation for 70 years.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Recent Videos

KFDX 3 News at 10:00 p.m.

Thumbnail for the video titled "KFDX 3 News at 10:00 p.m."

Popeye's chicken sandwich inspires Halloween costume

Thumbnail for the video titled "Popeye's chicken sandwich inspires Halloween costume"

Nintendo releases new "ring fit adventure" game

Thumbnail for the video titled "Nintendo releases new "ring fit adventure" game"

Clay county speed limit changes Tuesday

Thumbnail for the video titled "Clay county speed limit changes Tuesday"

Experts say a child's first visit to an orthodontist should come at age 7

Thumbnail for the video titled "Experts say a child's first visit to an orthodontist should come at age 7"

New medication offers postpartum depression relief

Thumbnail for the video titled "New medication offers postpartum depression relief"

Coach Caught Stealing Money From Players

Thumbnail for the video titled "Coach Caught Stealing Money From Players"

Baby dies in fire after children are left home alone

Thumbnail for the video titled "Baby dies in fire after children are left home alone"

Burk city commissioners vote down the ban of flavored e-cigarettes

Thumbnail for the video titled "Burk city commissioners vote down the ban of flavored e-cigarettes"

What The Tech: new Facebook design

Thumbnail for the video titled "What The Tech: new Facebook design"

Vacant home of James Staley vandalized

Thumbnail for the video titled "Vacant home of James Staley vandalized"

Property flipping brothers to revitalize two properties in Graham

Thumbnail for the video titled "Property flipping brothers to revitalize two properties in Graham"