Decision on retail FDI after weighing local interest: Sharma

Commerce and Industry Minister Anand Sharma today said the government has received "valuable" suggestions on opening multi-brand retail to FDI and the decision on the issue will be guided by national interest.

"We have received valuable inputs and we will form an opinion based on what is in the larger interest of the country," Sharma told reporters here today.

The Department of Industrial Policy and Promotion (DIPP), under Sharma's charge, has initiated a debate on the politically sensitive issue of allowing foreign direct investment in the multi-brand retail. It has received inputs from different stakeholders, besides the wings of the government, on the concept paper which was floated in July.

The paper had favoured opening of the sector subject to creation of back end logistics by the foreign retail stores.

"Surely, India is interested in creating the complete value chain, particularly investments in back end infrastructure, and ensuring that the value chain creates job opportunities," Sharma added.

A panel of senior officials has been set up to look into the suggestions received from stakeholders which include business chambers, WalMart India and French retail major Carrefour.

India does not allow FDI in multi-brand retail sector, which employs 33 million people and is dominated by mom & pop stores.

However, 51 per cent FDI is permitted in single brand retail while there are no restrictions on foreign investments in wholesale cash and carry format business.

India loses agri products, fruits and vegetables worth more than Rs one lakh crore annually due to lack of proper infrastructure like cold chain and warehousing, according to the discussion paper.

While there had been political resistance to the idea on the presumption that global players would swallow the small 'mom and pop' (kirana) stores, the industry has been pitching for allowing FDI in retail sector.