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Journalism of Courage
Indias flip-flop on the foreign direct investment (FDI) regime for retail has caused uncertainty amongst foreign investors said global rating agency Standard and Poors (S&P) said.
Investors want a 5 year plus perspective on FDI. But the back and forth by the government on FDI in retail has led to a lack of clarity amongst foreign investors such as Walmart, said Paul Gruenwald,chief economist (Asia Pacific),S&P on Saturday on the sidelines of the 46th Annual General Meeting of the ADB here.
The comments come at a time when the government is trying hard to woo foreign investors and increase capital inflows that are essential for spurring growth and financing the current account deficit that touched a record 6.7 per cent in the third quarter of the fiscal.
Concerns over clarity in the FDI regime coupled with Indias high fiscal deficit amongst foreign investors,contributed to the slowdown in Indian economy,Gruenwald said. But he maintained that the India story is relatively positive.
Meanwhile,earlier during the day,S&P also ruled out the possibility of a sovereign rating upgrade for India. … a rating upgrade at this point is not on the cards, said Elena Okorochenko,managing director,sovereign and international public finance ratings,Asia Pacific,but added that it could be considered later.
At present,S&P rates India with as a BBB minus with negative outlook. If you think the rating is on negative outlook,it is highly improbable that an upgrade follows from a negative outlook. Usually,the outcomes from a negative outlook is downgrade or stable outlook, she said.
