India needs hot money as MNCs head for exit
India’s deteriorating business climate is forcing the country deeper into a dangerous embrace of hot money. Foreign multinationals which bring in more stable financing are retreating. BHP Billiton is surrendering almost all its energy exploration blocks in the country. Wal-Mart recently ended its joint venture with Bharti Enterprises.
The high-profile departures have their roots in red tape and business-unfriendly policies. BHP lost its nerve over delays in obtaining security clearances. Wal-Mart is upset by rules requiring it to source at least 30 percent of its goods locally. Arcelor Mittal and South Korea’s POSCO scrapped separate steel projects in India in July after failing to acquire land.
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