New FDI norms to impact Air India, BigBasket, Food Bazaar, Amazon, Walmart among others

In a virtual overhaul of sorts, the Narendra Modi government on Monday relaxed Foreign Direct Investment (FDI) norms in key sectors such as civil aviation, pharma, defence and food retailing, among others. 

Here’s a snapshot of which companies might get impacted across each of the sectors.

  1. Civil aviation: State-owned Air India, which has been in the red, could face more heat, and clamour for its divestment could grow louder, if foreign investors back local players such as Spicejet or GoAir or invest in Indigo or Jet. The new move to allow foreign companies to buy stake in Indian carriers up to 100%, with FDI up to 49% permitted under the automatic route and the rest after government approval, will also benefit operators such as Air Asia and Vistara.
  2. Food retail: Monday’s decision effectively cleared most legal hurdles for online grocers like Big Basket, which could put more pressure on hyperlocal players like Grofers. Traditional retailers like Food Bazaar and Reliance Fresh will also get impacted because of this. It might even spark an Amazon-Walmart battle for the Indian e-commerce market when it comes to food retailing. The UK-based Tesco might also want to test waters post the announcement.
  3. Single brand retail trading: The changes will make way for setting up Apple stores in India owned directly by the California-based company. Retailers like Ikea could also benefit by the move. 
  4. Cable and DTH operators: Practically all operators including Hathway, DEN, Siti Cable, Dish TV and Videocon D2H, Tata Sky and Big TV could benefit.
  5. Pharma: The move could benefit almost all pharma companies.
  6. Airports: The GMR Group that operates the Delhi and the Hyderabad airports, the GVK group that runs the Mumbai airport and Cochin International Airport Ltd are the entities likely to get benefitted from the new regulation.
  7. Defence: Anil Dhirubhai Ambani Group, Mahindra Defence Systems, Tata Advance Systems, Larsen & Toubro are the companies likely to be impacted by the new FDI norms announced by the government.

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