A grim view on FDI in India

The Economist recently ran an article about how India is growing less hospitable to foreign investors: http://www.economist.com/node/21555602?story_id=21555602&fsrc=sky|IPoltis

Many foreign firms keep coming, or trying to come, to India as it is felt that there are opportunities here not to be missed. But the Economist warns that Foreign Direct Investment (FDI) may fall sharply. Some reasons are obvious: red tape, graft, a lack of opening to FDI, unpredictable new regulations, new taxes.. Some industries are also simply closed for the moment to further foreign participation, such as telecoms (in the wake of the 2G scam), insurance and retail. Returns on investments appear to have been low.

The article concludes by saying that:

"Is FDI in India over? Of course not. India is still growing faster than economies in the rich world and has vast potential as a manufacturing centre and as a market. But when potential investors hear the horror stories, they are likely to think twice."

As much as I feel that India can live and make progress without Walmart & co, it is still sad that the country is missing great opportunities in not allowing foreign investments - or local businesses - to thrive, for economic development or quality standards improvements (in the infrastructure sector for example)..