Jaitley maintains ambiguity on multibrand retail FDI

Finance Minister Arun Jaitley, while on the subject this Friday, chose not to clear the air on the Centre's stand on a policy sticking point, foreign direct investment (FDI) in multi-brand retailing.

Last week, the department of industrial policy and promotion (DIPP) had issued a policy document on FDI. In it, it had retained the earlier Manmohan Singh government's decision to allow up to 51 per cent FDI in multi-brand retailing.

On Friday, at a press conference marking the National Democratic Alliance government's one year in power, Jaitley was asked repeatedly by reporters if the government would bring relevant revisions to the document (the NDA was at odds with the policy when in the opposition).

"Our party's stance on FDI in multi-brand retail is well-known," Jaitley said, without clarifying if the policy would be changed. "The DIPP report only has the previous government's policy."

When asked whether investors should look at the BJP's stance or the government's official policy, the finance minister said: "Investors are smarter than you or me."

The statements were made at an event that aimed at highlighting the achievements of the Modi government's first year in power and as a primer to the key reforms it hopes to implement. Many such media and public interactions are planned over the coming week.

The issue of FDI in multi-brand retailing was one of the big planks on which the BJP and its allies had attacked the previous government. Political economists say the party's stance won it the support of small and traditional traders and store owners. Major global names such as Carrefour have had to retreat from the sector; Walmart has been uncertain about investing.

A day earlier, Commerce Minister Nirmala Sitharaman had said she would not consider any proposal to open multi-brand retailing to FDI. She added she'd request the Cabinet to formally delete the provision.