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Retailers want assurance on continuation of FDI Policy
21
Jun '13
Some global multi-brand retailers have sought an assurance from the Indian Government that any change of governments both at the Centre and in the states would not result in reversal of the foreign direct investment (FDI) Policy.
 
Retailers like Walmart and Tesco have sought the clarification before they decide on investing in India, says an Economic Times report quoting PTI.
 
An internal note of the Department of Industrial Policy and Promotion (DIPP) said some potential foreign investors have discussed their plans for investing in multi-brand retail trading (MBRT) in India, however, they need to address certain apprehensions raised by their Boards before taking the decisions.
 
One of the major issues raised by Walmart and Tesco relates to the continuation of the FDI policy for MBRT, even if there is any change in Government at the Central level.
 
They have also sought a clarification whether states, which have at present given nod for opening of front-end stores in their territory, can opt out at a later date.
 
The queries assume importance as general elections are due in India next year.
 
The Indian Government allowed up to 51 percent FDI in MBRT last year. But so far, only 11 Indian states have given green signal to allow foreign retailers to open stores in their territories. 
 
Earlier this month, the DIPP issued some clarifications pertaining to 30 percent sourcing from small and medium enterprises, and 50 percent investment in back-end infrastructure, in response to queries by global retailers.
 
Walmart already has 50:50 cash-and-carry joint venture with India’s Bharti Group, while Tesco is in partnership with Tata Group.
 

Fibre2fashion News Desk - India

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