Skip to content
Search

Latest Stories

Foreign investors hope India dials back policy shocks after Modi win

FOREIGN companies in India have welcomed prime minister Narendra Modi's election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.

Modi's pro-business image and India's youthful population have lured foreign investors, with the US firms such as Amazon.com, Walmart, and Mastercard committing billions of dollars in investments and ramping up hiring.


India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.

But from around 2017, critics say, the leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervour ahead of elections.

"I hope he's now back to wooing businesses," said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.

"Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors."

India stuck to its policies despite protests and aggressive lobbying by the US government, US-India trade bodies and companies themselves.

Modi was set to hold talks on Friday (24) to form a new cabinet after election panel data showed his Bharatiya Janata Party (BJP) had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.

After Modi's win, about a dozen officials of foreign companies in India and their advisers said that they hoped he would ease his stance and dilute some of the policies.

Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.

Protectionism concerns "are small hurdles you have to go through", however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.

"There will be more business-friendly policies and more private enterprise coming into India," he added.

Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi's push for electronic payments instead of cash.

Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow "unfettered supervisory access", a change that prompted WhatsApp to delay plans for a payments service.

Modi's government has also drafted a law to clamp similar stringent data norms on the entire sector.

But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16bn in India's Flipkart.

Policy changes also hurt foreign players in the $5bn medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.

Modi's government said the move aimed to help poor patients and curb profiteering, but the US government and lobby groups said it harmed innovation, profits and investment plans.

"If foreign companies see their future in this country on a long-term basis...they will have to look at the interests of the people," said Ashwani Mahajan, an official of a group that pushed for some of the measures.

That view was echoed this week by two policymakers who said government policies will focus on strengthening India's own companies, while providing foreign players with adequate opportunities for growth.

Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one official of a US tech firm saying, "I'd rather be more worried than be optimistic."

(Reuters)

More For You

ve-day-getty

VE Day 80 street parties, picnics and community get togethers are being encouraged to take place across the country as part of the Great British Food Festival. (Photo: Getty Images)

Public invited to attend VE Day 80 procession and flypast

THE 80th anniversary of Victory in Europe (VE) Day will be marked with a military procession in London on May 5.

The event will include over 1,300 members of the Armed Forces, youth groups, and uniformed services marching from Parliament Square to Buckingham Palace.

Keep ReadingShow less
Knife crimes

Knife-enabled crimes include cases where a blade or sharp instrument was used to injure or threaten, including where the weapon was not actually seen.

Getty Images/iStockphoto

Knife crime in London accounts for a third of national total: ONS

KNIFE-RELATED crime in London made up almost a third of all such offences recorded in England and Wales in 2024, with the Metropolitan Police logging 16,789 incidents, according to figures released by the Office for National Statistics (ONS) on Thursday.

This amounts to one offence every 30 minutes in the capital and represents 31 per cent of the 54,587 knife-enabled crimes reported across England and Wales last year. The total number marks a two per cent rise from 53,413 offences in 2023.

Keep ReadingShow less
Starmer and Modi

Starmer and Modi shake hands during a bilateral meeting in the sidelines of the G20 summit at the Museum of Modern Art in Rio de Janeiro, Brazil Brazil, on November 18, 2024.

Getty Images

Starmer calls Modi over Kashmir attack; expresses condolences

PRIME MINISER Keir Starmer spoke to Indian prime minister Narendra Modi on Friday morning following the deadly attack in Kashmir’s Pahalgam region that killed 26 people on Tuesday.

According to a readout from 10 Downing Street, Starmer said he was horrified by the devastating terrorist attack and expressed deep condolences on behalf of the British people to those affected, their loved ones, and the people of India. The two leaders agreed to stay in touch.

Keep ReadingShow less
 Post Office Horizon

A Post Office van parked outside the venue for the Post Office Horizon IT inquiry at Aldwych House on January 11, 2024 in London, England. (Photo: Getty Images)

Getty Images

Post Office spent £600m to keep Horizon despite plans to replace it: Report

THE POST OFFICE has spent more than £600 million of public funds to continue using the Horizon IT system, according to a news report.

Despite deciding over a decade ago to move away from the software, the original 1999 contract with Fujitsu prevented the Post Office from doing so, as it did not own the core software code, a BBC investigation shows.

Keep ReadingShow less
Pahalgam attack: Prayer meet held at Indian mission in London

The prayer meet was led by Indian High Commissioner to the UK Vikram Doraiswami

Pahalgam attack: Prayer meet held at Indian mission in London

Mahesh Liloriya

A PRAYER meet was held at the Gandhi Hall in the High Commission of India in London on Thursday (24) to pay respects to the victims of the Pahalgam terrorist attack.

Chants of ‘Bharat Mata Ki Jai’ rang out at the event which was led by Indian High Commissioner to the UK Vikram Doraiswami.

Keep ReadingShow less