Govt says no to FDI in retail, yet again

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14 FDI proposals worth Rs 826 crore cleared

New Delhi, Mar 14 : There is no proposal to allow Foreign Direct Investment (FDI) in the retail sector, agriculture minister Sharad Pawar on Friday said.

“There is no proposal to allow FDI in retail & we are not thinking of it because it wants to protect the interest of retailers,” he said during question hour in Rajya Sabha. He said International Council for Research on International Economic Relations (ICRIER) would submit its report on impact of domestic organised retailing on the unorganised sector by May 2008.

The study titled ‘the Impact of Organised Retailing on the Unorganised Retail Sector’ was commissioned in March 2007. ICRIER was to submit its report in July 2007 but the schedule was changed for enabling additional survey.

It would cover “effect of organised retailing on small retailers and vendors in the unorganised sector keeping in mid the likely growth in the overall market and effect on employment,” he said. Following the recommendations and findings of the study, the government would discuss on the FDI policy on retail, he said.

Pawar said the union government does not regulate retailing and it falls under the jurisdiction of the state governments. “State governments can allow or disallow setting up of retail establishments,” he said.

“The retailers/traders register their shops with concerned authorities in various states. At present, there is no restriction on the entry of any domestic investor into retail sector,” he said pointing to 10-12 big corporate and industrial houses envincing interest in organised retail.