Power companies may exit India
New Delhi: With enough new power projects picking up in North America and the mess in the domestic power policy, well known global power developers are suddenly cooling off towards India.

These players have had to suffer interminable gestation period and deal with the precarious health of state electricity boards that finally purchase their power.

The reinvigoration in the US power segment is seeing the investment dollars flow back into the US. This trend is clearly evident from the long list of global players who were very hot on India and are now slowing down their activities in the country, or getting out totally. These include companies like Cogentrix, Powergen, ABB, Siemens and National Power, to name but a few.

Power developers like ABB and Siemens, who had earlier competed with each other to bid and get a share of the equipment and engineering, procurement and contract (EPC) market in India, are now either pulling out of projects or are unwilling to accept fresh orders.

Naphtha-based projects, projected to come about as mid-term solutions for India’s power shortage, are the worst hit. As naptha-based projects are virtually unique to India, equipment for it has to be made specially. But equipment suppliers were willing to make the extra effort as the Indian market was lucrative. But now with demand growing elsewhere, the interest for making equipment for naptha-based projects has waned.

In the next few years, the US will retire a large number of its nuclear power stations to be replaced by gas-based stations. Given this situation, it is likely that more and more power companies would shift their focus to the more lucrative and organised US market, than concentrate their efforts in India, where there still exists several shortcomings.
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Government may announce new FDI policy for retail sector
New Delhi: The government has announced that, based on the several requests received from foreign companies for setting up subsidiaries in retail trading, the commerce and industry ministries are working closely to bring out a new policy to govern foreign direct investment in the retail industry.

Under the existing guidelines, foreign companies are not allowed to enter retail trading. The current thinking is that such ventures should be permitted if they undertake to dilute their equity within a fixed timeframe. The extent of equity to be divested in favour of Indian investors and the time schedule for doing so are to be decided.

This move to open up the retail sector has been stoutly opposed by the trader and distribution-agents lobbies, who perceive a threat to their existence in the pre-retail segment, should the entry of FDI in this sector be brought about. These bodies have been raising the bogey that "allowing foreign companies to enter retailing may create strategic concerns".
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