Market access in the context of FDI policy implies the ability of a foreign investor to enter the investment space in India and the limitations thereon. For example, a foreign multi brand retail investor can invest in India only after the government decision is notified. Thus, access to the Indian market for multi brand retail is blocked for foreign investment till then.
National treatment implies that a domestic and foreign investor are treated equally. The FDI policy itself envisages unequal treatment in a range of sectors which is embodied in the sectoral caps, security restrictions, etc.
This means, for example, that while an Indian investor can invest 100% in multi brand retail trading in India, a foreign investor will still be allowed to invest only 51%. Further, all the attendant conditions of the policy have only to be complied with by the foreign investor and not an Indian investor setting up a multi brand store without foreign investment.
BIPA: The BIPA is a post-establishment investment agreement. This implies that once an investor enters the country, that investor must be treated the same as a domestic investor unless the limitations to national treatment are clearly spelt out at the pre-establishment stage. The FDI policy is a pre-establishment instrument and therefore not covered by BIPA.
CECA/CEPA: In these agreements, India has taken both pre and post establishment commitments. In the pre-establishment commitments, the FDI policy has been bound which means that any rollback would require consultations with the partner country and could entail quid pro quo in terms of concessions in some other area.
Within the FDI policy, commitments may be taken only in some specified sectors (positive listing). Since FDI in multi brand retail trading was not allowed when these agreements were negotiated, none of these agreements is affected by the recently approved policy. Moreover, state and local regulations are not a part of the commitments.
Multilateral/WTO: Multi brand retail trading is classified as a service and therefore covered by the General Agreement on Trade in Services (GATS).
India has not undertaken any commitments in this area under the GATS. As such, there is no impact of the policy on our commitments under the WTO. Investment is not a part of WTO disciplines except through Mode 3 under GATS.
Textiles | On 22nd Oct 2016
The Central government is likely to extend the recently approved Rs...
Apparel/Garments | On 22nd Oct 2016
Reebok, a pioneer in the sporting goods industry, has brought sneaker ...
Sunil Kumar Sharma
Loknayak JPNSSSG Ltd
'The blend of cotton–linen yarn has high demand in the domestic and...
Palod Himson Machines
Fabric processing machines are picking up
Mukesh Agarwal & Rajesh Agarwal
Madhuram Fincap Pvt Ltd
Increasing prices and lack of demand main issues facing industry
Bombay Textile Research Association
Bombay Textile Research Association (BTRA) is a leading name in textile...
Suominen Corporation is a manufacturer of nonwovens as roll goods for...
Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...
Gildan Activewear SRL
Gildan Activewear, a manufacturer and marketer of branded clothing and...
Hyderabad-based designer Prathyusha Garimella is known for blending...
Bani Batra’s couture wedding collection is inspired by traditional Indian...