New policy on FDI in multi-brand retail soon: Scindia

The Government today indicated that a new policy on foreign direct investment in the politically sensitive multi-brand retail sector will come soon.

At present, India does not allow FDI in the lucrative retail sector, which employs 33 million people and is dominated by mom & pop stores (kirana shops).

"Let me assure you that it (the inter-ministerial committee set up for the purpose) will not take inordinate amount of time...There cannot be an open-ended time line, we are monitoring the progress of that group," State Minister for Commerce and Industry Joytiraditya Scindia told reporters at a CII meet here.

 A six-member committee is evaluating the stakeholders' comments, received by the Department of Industrial policy and Promotion (DIPP), the nodal department on FDI policy, on its discussion paper on opening the sector for FDI.

"They (the committee) are working on the feed back. 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," Scindia added.

 The DIPP, in July, initiated a debate on the sensitive issue of allowing FDI in the multi-brand retail sector. It received inputs from stakeholders, including business chambers, WalMart India and French retail major Carrefour, besides the wings of the government.

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

 The committee comprises officials from 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 format business.

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

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