1. Narendra Modi government mulls tweaking rules, may allow 100 pct FDI in retail, open up food retail

Narendra Modi government mulls tweaking rules, may allow 100 pct FDI in retail, open up food retail

Other proposals relating to the retail sector include allowing 100% FDI in single-brand retail through the automatic route. Currently, only 51% FDI is allowed in multi-brand retail via the government route. Similarly, while 100% FDI is allowed in single-brand retailing.

By: | New Delhi | Updated: July 15, 2017 7:18 AM
Prime Minister Narendra Modi, foreign direct investment, fdi, 100% FDI in multi-brand retail, Wal-Mart, multi-brand retail sector, commerce minister Nirmala Sitharaman, FDI in print media Prime Minister Narendra Modi on Friday chaired a meeting to review the foreign direct investment (FDI) regime in the country.

Prime Minister Narendra Modi on Friday chaired a meeting to review the foreign direct investment (FDI) regime in the country, in which further liberalisation in key sectors, including retail and construction, is learnt to have been discussed. According to a proposal, India is considering allowing 100% FDI in multi-brand retail, which will allow retailers like Wal-Mart and Carrefour to set up their own outlets without a local partner. However, this will be permitted on the condition that foreign retailers will sell only those items produced in India and create massive jobs. Most of the other conditions, such as a minimum investment of $100 million and at least $50 million on storage and logistics infrastructure, are applicable even now for multi-brand retail.

Other proposals relating to the retail sector include allowing 100% FDI in single-brand retail through the automatic route. Currently, only 51% FDI is allowed in multi-brand retail via the government route. Similarly, while 100% FDI is allowed in single-brand retailing, any such investment beyond 49% needs government approval. In construction, one of the proposals relates to allowing FDI in even undeveloped and underdeveloped plots in a project, albeit with certain conditions. The government currently permits 100% FDI in only developed plots where the basic trunk infrastructure is in place. There was also a proposal to further liberalise FDI in print media.

The meeting was attended by commerce minister Nirmala Sitharaman, according to sources. The move to further liberalise the multi-brand retail sector was initially opposed by the BJP during the UPA regime. However, as demand for jobs started growing and India became a more attractive destination for foreign companies, the government seems to have eased its opposition to such a move. The proposal to ease rules has other riders attached. Retailers will have to spend at least $50 million on storage and logistics infrastructure and employ 1,000 people for every $100 million of investment, apart from sourcing 30% of their products from small companies, the people said. The food processing ministry has also been pushing to partially ease rules for retailers that would allow them to sell soaps, shampoos and toothpastes along with food products. India’s food and grocery market is the world’s sixth largest, with retail contributing 70% of sales.

The Modi government has already announced two big rounds of relaxations in the FDI regime, first in November 2015 and then in June last year, easing rules in over a dozen sectors ranging from real estate, pharmaceuticals, food marketing, aviation and defence to e-commerce and banking. Presenting the Budget for 2017-18, Jaitley had said the government would be considering further relaxing FDI rules to make it even easier for foreign companies to invest in India.

  1. R
    RAMASWAMY
    Jul 15, 2017 at 8:47 am
    EVERY ONE REMEMBERS THAT SPLIT TONGUED BJP SNAKES WERE BENT ON OPPOSING SUCH SIMILAR BUT YET MORE INDIAN FRIENDLY PROPOSAL WAS BROUGHT BY MANMOHAN SINGH GOVERNMENT. NOW THEY DISCOVERED GREATNESS OF FDI IN RETAIL. RIDICULOUS CREATURES.
    Reply
    1. santosh kumar
      Jul 15, 2017 at 7:52 am
      We already agreed long back that we are inefficient and that we are not capable to do any work be it in the complex technology or a laborer and also that we have no intentions to improve. By not improving I mean our leaders never wants to even feel that we are capable to do things, because they are funded and glorified which wants to make money out of our demoralizing thoughts. We are selling airlines, railway stations to foreign firms and the Irony that we are patriotic in saying Desi. What desi when we are facilitating foreigners in every nooks of engagements. We should understand we can only even think about country progressing when FDI is reduced and we are able to stand business and keep it profitable on our own investments and we need many such business, I dont know why so called b ed leaders and scholars people creates mess out such a simple things, offcourse they are not fool but they intelligent enough to keep us being messed and demorlized (and they are paid for it).
      Reply

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