Reforms Slowing Down in India, China

India's parliament voted on Wednesday to suspend the pending legislation that would have reformed the country's rules on foreign direct investment (FDI), thereby allowing foreign retailers to have 51% ownership of what the government calls "multi-brand retail". This move would have opened the door to foreign retailers like Carrefour, Tesco and Walmart, and allowed them to move forward with their own operations within India.

On Thursday, two of India's troubled domestic air carriers, Air India and Kingfisher, had their bank accounts frozen by the government because each was unable to make the necessary tax payments to authorities. To those unfamiliar with what has been happening inside of India over the past month, the two events might seem unrelated, but in fact one is a contributing factor in the other's difficulties.