Govt moves a step closer to FDI in retail

The investor in multi-brand retail will have to make a minimum investment of $100 million initially. At least 50 per cent would have to be invested in back-end infrastructure like cold storage chains and logistics.

The proposal to allow 51 per cent FDI in multi-brand retail was given the green light by the Committee of Secretaries in July,but has been kept in abeyance due to a lack of political consensus. Both the BJP and Left — besides various traders bodies — have expressed concerns over the possible fallout on the neighbourhood kirana shop. Retail majors like Wal-Mart,Carrefour and Tesco have shown keen interest in entering the Indian market but have been prevented by existing rules.

The note has proposed that 30 per cent of procurement should be from small industries,and the government should have the first right of procurement for agri-products.

The foreign investor will have to self-certify the company regarding compliances,said a senior official. Retail stores would be allowed to open in cities with populations of 10 lakh or more as per the 2011 census.

“Finance ministry has given concurrence to the proposal of the DIPP on allowing FDI in multi-brand retail sector,” said the official.

For FDI in single brands,the DIPP has proposed that the products must be sold under the same brand name internationally,and that the foreign investor must be the owner of the brand.