The government has no proposal to change the existing foreign direct investment (FDI) policy in the multi-brand retail trading sector, a top official said Thursday.
"You know the multi-brand retail policy that exists today. There is no proposal for change," Secretary in the Department of Industrial Policy and Promotion (DIPP) Ramesh Abhishek said here.
He was replying to a question whether the government is looking at increasing FDI cap to 100 per cent in the sector, a politically sensitive segment.
Although the current FDI policy permits overseas players to hold 51 per cent stake in an Indian multi-brand retail company, the BJP in its election manifesto had opposed overseas investment in the retail segment.
So far, only one foreign player, Tesco, has received approval for opening stores under the multi-brand retail policy. The previous UPA government had cleared the proposal.
The statement assumes significance as industry body CII in its recent report suggested the government to permit 100 per cent FDI in multi-brand retail trade. Confederation of All India Traders (CAIT) has strongly opposed this suggestion.
Abhishek said the $650 billion retail sector is growing fast and that it holds huge potential for businesses.
"Organised retail is only 10 per cent (of this figure) and out of that e-commerce is only 3 per cent. I think there is a tremendous scope for growth in e-commerce and organised retail," he said.
Abhishek said with growing middle class and increasing incomes, the retail sector is set for a massive revolution.
"So there is a plenty of scope to make money and do well," he said here at CII's conference on 'MNCs and India: Creating Mutual Value'.
Further, the secretary asked the industry to provide convincing arguments and detailed analysis while recommending some policy changes.
On reducing corporate tax, Abhishek said his department too favours cut in this tax rate and " we definitely hope that a more competitive environment will be made for tax rates".
Finance Minister Arun Jaitley had lowered corporate tax rate to 25 per cent for businesses with turnover up to Rs 250 crore.