Home / Knowledge / News / FDI in multi-brand retail do not violate int'l pacts
FDI in multi-brand retail do not violate int'l pacts
19
Sep '12
Ministry of Commerce & Industry explained that there are two types of commitments are undertaken in an international investment agreement i.e. market access and national treatment. FDI policy is amenable to both market access and national treatment issues.

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.


Must ReadView All

Indian govt approves special package for leather, footwear

Textiles | On 16th Dec 2017

Indian govt approves special package for leather, footwear

The Union Cabinet chaired by PM Narendra Modi has approved a special...

EU parliament resolution calls for Cambodia sanctions

Apparel/Garments | On 16th Dec 2017

EU parliament resolution calls for Cambodia sanctions

Following the ongoing crackdown in Cambodia on the opposition and...

Affordable prices to be hit if US pulls out of NAFTA: NRF

Apparel/Garments | On 16th Dec 2017

Affordable prices to be hit if US pulls out of NAFTA: NRF

US retailers’ ability to offer consumers quality products at...

Interviews View All

Kaizad Hansotia
GetNatty

Competition is the best thing that can happen to a startup

Mandeep Nagi
Shades of India

Women value something that is unique and has a flavour of India

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

Anupam Arya

<div>Jaipur-based Fabriclore Retailing Pvt. Ltd. is attempting to revive...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

December 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.6%
No
12.0%
Skip
18.5%

Total Votes: 92

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
62.0%
No
30.4%
Skip
7.6%

Total Votes: 92

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.0%
No
9.8%
Skip
3.3%

Total Votes: 92

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
81.5%
No
8.7%
Skip
9.8%

Total Votes: 92


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search