Business Opportunities in India
FDI in Multi-Brand Retail Sector
Our Bureau
Date of posting: 23-02-11
      FDI in Multi-Brand Retailing is still an open issue in India. Jyotiraditya M Scindia, Minister of State for Commerce & Industry, has infomred about the status of discussion in the government.

      The existing policy allows for 51 % Foreign Direct Investment (FDI), in only single brand retail trade, subject to specified conditions. Government has received suggestions from associations /trade bodies for allowing FDI in multi brand retail. The objective is to enhance the operational efficiency of back-end infrastructure in the retail sector, reduce wastage in the agricultural sector, enhance benefit to producers, integrate the retailer in the value chain and benefit consumers through greater competition, as per the various arguments. Towards this end, the Department of Industrial Policy and Promotion had released a Discussion Paper titled “Foreign Direct Investment in Multi-Brand Retail Trading”, with the aim of generating informed discussion on the subject and obtaining the views and comments of various stakeholders. Comments were received from a number of stakeholders, including State Governments as well as Ministries/ Departments of the Government of India. Some State Governments have supported allowing FDI in retail on the ground that this woul dencourage investments in back end infrastructure, reduce wastage and provide better price to farmers.

      An inter-Ministerial Committee was constituted to examine the comments received on the Discussion Paper, but the Government has yet to take a final view in the matter.

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