Local Choices, Global Effects

FDI in retail: Why 30% local rule is 100% trouble for MNCs - The Economic Times: "But shouldn't these people be over the moon? The government has after all granted their wish and a long-pending one at that. Companies such as Wal-Mart Stores Inc, the world's biggest retailer, have long been lobbying to enter India.

Yet, it is obvious why retailers are not ecstatic. The government's welcome mat to multinational supermarkets is riddled with riders. Under the new rules, foreign multi-brand retailers must invest at least $100 million and half that amount must be ploughed into back-end infrastructure in rural areas.

That's not all. State governments will decide if they want foreign players and stores will be permitted only in cities of at least 1 million people. Retailers must also source 30% of the value of goods purchased from small- and mid-sized domestic suppliers."

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