India

While the government's decision to allow full foreign ownership in the country's single-brand retail sector is a positive step towards economic liberalisation, we highlight that the presence of restrictive conditions will continue to cause problems for firms planning to enter the sector. In particular, we highlight Ikea's decision to withhold its entry, as the company cited the requirement to source 30% of goods from local businesses as a cause for concern. Although the government may find it politically difficult to ease restrictions even further, we highlight that the recent downturn in investment activity could force the government's hand.

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