Finally the much awaited reform measure in FDI in the retail sector is here. Today, the government has finally announced relaxation of Foreign Direct Investment (FDI) norms in the retail sector. It has allowed up to 51 per cent FDI in multi-brand retail and 100 per cent FDI in single brand retail. This was announced by the Commerce Minister, Anand Sharma.
However, the catch is that it is upto the states to implement it. Sharma said that states like Andhra Pradesh, Assam, Haryana, Delhi, Rajasthan, Manipur, Jammu and Kashmir want FDI. "There are states that have reservations about FDI in retail but modern technology is necessary. Remunerative pricing, sourcing is needed," Sharma added.
Sharma said the policy on multi-brand retail FDI as enabling and it has an 'Indian signature' to it. Meanwhile, Sharma also announced relaxation of sourcing norms for FDI in single brand retail. "For FDI proposals beyond 51 per cent in single brand retail, 30 per cent sourcing from 'Small Industries' has been made mandatory," CCEA said. "The move will attract investment, create employment," Sharma said. It may be recalled the government had had allowed 51 per cent FDI in multi-brand retail in December last year, but the decision was kept in abeyance following widespread opposition from the allies and opposition parties.
Chairman AEPC A Sakthivel has welcomed the move to allow FDI multibrand retail in India on behalf of the entire textiles industry. Hailing the government decision he said, “It is a win-win situation for everyone. With the amount of money to be invested in back-end, supply chain and farm sector will benefit. This move would help bring in the much needed capital for the sector. Even the small and medium enterprises will benefit. Eventually consumers will get a lot of choices and they will get products at better prices.”