Washington: The US government and corporate America alike have welcomed the Indian parliament's approval of foreign direct investment in multi-brand retail, saying it would spur investment in infrastructure and benefit the consumer.
"We believe direct foreign investment in retail will grow markets in India as it has in China, Brazil, and many other developing economies," said State Department spokesman Mark Toner on Friday.
"As Indian officials have pointed out, foreign direct investment can create opportunities for small businesses, for farmers, spur investment in infrastructure, and bring benefits to consumers," he said.
Asked how it would increase US-India trade, Toner said that while he did not have the numbers "a number of US firms are obviously keen to invest in the retail sector of India, and obviously I think will only deepen our economic cooperation."
The US-India Business Council (USIBC), made up some 400 top US companies seeking better commercial ties with India, has also applauded the measure.
"The new law will usher in much needed investments and expertise into supply chain development that can more efficiently link farmers directly to markets, thus minimising loss due to inadequate storage and transportation facilities," it said.
"We thank the UPA government and supporting parties for working together to pass this important bill. It will modernise India's retail sector and rein in high levels of inflation" said Ron Somers, USIBC President.
"FDI in multi-brand retail will support the government's goal of achieving remunerative prices for farmers, and will also increase quality and choice for India's increasingly sophisticated consumer base."
Recognizing that it will be up to individual states to implement this big bang reform, USIBC is keen to work with progressive state governments including Uttar Pradesh, Gujarat, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Punjab, and Bihar, and in 2013, will lead many of its 350 member companies to visit these states, he said.