India's new budget is great for foreign ecommerce giants, less great for Indian poor
Indian finance minister, Arun Jaitley, has announced the country's first budget since the election of new US-friendly Prime Minister, Narendra Modi.
As Pando's Mark Ames previously reported, the Modi government is determined to roll out a red carpet for foreign tech companies. Last week, Facebook COO Sheryl Sandberg met Modi and afterwards congratulated the leader (who has been implicated in sectarian mass killings, and was until recently on the US visa blacklist) for "making the education of girls and women a priority as equal opportunity is essential for strengthening all economies and creating a just world." Modi's re-election campaign was aided by the former head of Omidyar Network India, an organization founded by eBay's Pierre Omidyar.
The Indian government on Thursday proposed allowing foreign retailers, who manufacture products in the country, to sell via e-commerce platforms, a step towards liberalising foreign investment in the country’s $13 billion e-commerce sector.
The move is likely to benefit the local units of retailers such as Marks & Spencer, Nike, Puma and Benetton among others, who currently sell online in India through local franchisees or licensing agents. The proposal, presented by Finance Minister Arun Jaitley as part of his budget for the fiscal year through March 2015, will also end the ambiguity around who can sell their products using online platforms, industry consultants said. And, say experts, the move to make it easier for foreign companies to sell Indian-made goods directly in the country is likely just the first step in a plan to open India up to direct foreign investment (DFI).
Also from Reuters:
India could allow global online retailers such as Amazon.com Inc to sell their own products as early as next month, removing restrictions that have held back competition in one of the world's biggest, and most price-sensitive, retail markets.
The decision, which is likely to be announced in or alongside the budget, is one of the first tangible signs of economic reform by the business-friendly government of Prime Minister Narendra Modi, who was sworn in 10 days ago. All of which is, of course, great news for the US companies who have pledged to invest heavily in a more US tech-friendly India.
Meanwhile, the budget had less good news for India's poor. The Wall Street Journal reports that the the Modi government aims to make subsidies for the poor "more targeted" in a plan to "trim" the 2.5 trillion rupees the country currently spends on its poorest citizens.
According to the most recent estimates from the World Bank, 400 million Indians live on less than the equivalent of $1.25 per day. By comparison, a paperback copy of Atlas Shrugged will cost you around $8 on Amazon.in.