The policy is meant for removing restrictions on offline as well as online retailers, a senior official told a leading daily. He added that the matter will be taken up by the government in the near future.

The announcement comes days after finance minister Arun Jaitley said in his Budget speech that the government is working on liberalising the FDI policy. Over 90 per cent of the FDI in India is coming through the automatic approval route.

Experts believe that doing away with restrictions will benefit Indian producers. Manufacturing industry will get a boost and jobs will not be affected if the rules are relaxed, said Devraj Singh, executive director of EY.

As manufacturing is lagging behind services in total FDI, the Indian government is looking at boosting the manufacturing sector to create more jobs.

According to the current FDI policy foreign retailers can set up marketplaces and cannot have an inventory for selling goods on their own. Multibrand retailers also have a lot of restrictions and they can own not more than 51 per cent of Indian ventures. (KD)

Fibre2Fashion News Desk – India