New Delhi: The government today indicated that it will soon have a new policy on foreign direct investment (FDI) in the politically sensitive multi-brand retail sector, reports PTI.
At present, India does not allow FDI in the lucrative retail sector. The traditional retail business is dominated by kirana stores and it is estimated that about 33 million people are employed in these neighbourhood outlets across the country.
"Let me assure you that the inter-ministerial committee set up for the purpose will not take an inordinate amount of time ... there cannot be an open-ended timeline. We are monitoring the progress of the group," minister of state for commerce and industry Joytiraditya Scindia told journalists at a meeting of the Confederation of Indian Industry (CII) in the national capital.
A six-member committee is evaluating stakeholders' comments on a discussion paper on opening up the retail sector for FDI prepared by the Department of Industrial Policy and Promotion (DIPP), the nodal department on FDI policy.
"They (the committee) are working on the feedback. There is going to be a single recommendation that will come out and then a consensus will have to be built around that before we take that in terms of a policy," Mr Scindia said.
In July, the DIPP initiated a debate on allowing FDI in the multi-brand retail sector. It received responses from stakeholders, including business chambers, WalMart India (the Indian venture of the American retail chain) and Carrefour (the French retail major), besides various departments of the government.
The concept paper favoured opening of the retail sector, subject to the creation of back-end logistics by foreign retailers setting up businesses in India.
The committee has officials from the ministries of micro, small and medium enterprises, agriculture, finance, rural development, commerce and industry and consumer affairs.
While multi-brand retail is closed for foreign investors, 51 per cent FDI is permitted in single-brand retail, while there are no restrictions on inflows in wholesale cash-and-carry business.
According to the discussion paper, the country loses more than Rs1 lakh crore annually on agri-products, like fruits and vegetables, due to lack of proper infrastructure such as cold chain storage and warehousing.
While there had been political resistance to FDI in multi-brand retail on the presumption that global players would swallow the small kirana stores, the industry has continued to pitch for allowing FDI in the business.
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