Govt for discussion on FDI in multi-brand retail

India today said it would next month initiate discussion on liberalising Foreign Direct Investment in sectors ranging from defence to agriculture and even retail -- a source of political woes for the government in the past.

The Department of Industrial Policy and Promotion (DIPP), the nodal agency for framing FDI policies, will come out with six discussion papers in mid-May on overseas investment norms.

"All the issues, which are troubling you will be covered (in the discussion papers)," DIPP Secretary R P Singh told reporters at a FICCI event here when asked if multi-brand retail would also figure in the discussion papers.

In its first term, the UPA government had shelved plans to open FDI in multi-brand retail owing to fierce opposition from its then allies -- Left parties -- and petty traders.
    
India, however, allows 51 per cent FDI in single brand retail and 100 per cent in cash-and-carry (wholesale) sector.
    
While transnational companies like WalMart, Carrefour and Indian industry chambers are pitching for opening up multi- brand segment, a Parliamentary panel has proposed a "blanket ban" on entry of corporates into this unorganised sector employing millions of people.
    
Sources in the DIPP said the discussion papers, which would be put in public domain on May 12 or 13, would deal in sectors like retail, defence, pharmaceutical and agriculture.
    
The DIPP would seek public comments on the concept papers, Singh said.
    
On pharmaceuticals, Singh said the department was not averse to FDI, but is demanding review of the policy.
    
"They (Department of Pharmaceutical) are not opposing (FDI). They are only saying that FDI (policy) should be reviewed and it should not result in Indian companies being purchased by outsiders," he said.
    
India allows 100 per cent FDI in drugs and pharmaceuticals through automatic route.
    
In March this year, India had released a compendium of all the polices related to FDI as part of a drive to make things simple.
    
The West, including the US and EU, is separately asking India to open its financial sector to FDI and a Bill to raise FDI in insurance sector to 49 per cent from 26 per cent now is pending clearance in Parliament.
    
FDI inflows in the first 10 months of 2009-10 were $22.9 billion.