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USIBC Applauds the Government of India for Big Bang Reforms.

WASHINGTON -- The U.S.-India Business Council (USIBC) today hailed India's progress in advancing major economic reforms with the Cabinet's approval of opening India's multi-brand retail sector to foreign direct investment (FDI), and increasing equity caps in civil aviation, broadcasting, and power trading exchanges. The government's courageous resolve to move on these complex reforms serves as an assurance to investors that its economic liberalization agenda is back on track.

"The reforms approved by the Cabinet today are a welcome signal to investors everywhere. The U.S.-India Business Council applauds the government's bold actions that will help create a predictable investment and business climate," said Ajay Banga, Chairman of USIBC's Board of Directors. Mr. Banga is President & CEO of MasterCard Worldwide.

"Opening the multi-brand retail sector to foreign direct investment will drive the modernization of India's expansive agri-retail marketplace. India's supply chain infrastructure will see improved efficiencies and expertise, consumers will benefit from increased quality and choice, and inflation and rising food costs will be tamed," said Ron Somers, President of USIBC. "These big bang reforms send a crystal clear signal that India is open for business."

The government of India's decision to allow foreign carriers to buy a 49% stake in Indian private airlines comes at a crucial time following heavy losses borne by many of India's carriers this past fiscal year. Raising the equity cap presents an opportunity for U.S. carriers to be a part of India's remarkable growth in passenger traffic over the next decade.

FDI in all broadcast-carriage services has been raised to 74% from 49% previously. USIBC believes this will provide industry with the leverage it needs to help fund India's digitization plan.

USIBC further welcomes the decision to permit foreign investment of up to 49% in power trading exchanges. India's power exchanges will benefit from the introduction of global best practices, new technology, and capital infusions, which will facilitate the transfer of power from surplus to deficit regions and improve grid stability and reliability.

"This is a win-win for everyone," said Mr. Banga.

The U.S.-India Business Council (USIBC) is the premier business advocacy organization formed by the U.S. and Indian governments in 1975 whose purpose is to deepen two-way trade and strengthen commercial ties. Today, USIBC is comprised of 350 top-tier U.S. and Indian companies.
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Publication:Business Wire
Geographic Code:9INDI
Date:Sep 14, 2012
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