10.12.11

India Inc. on FDI in Retail






India Inc slammed the government’s move to put on hold the decision to open up the multibrand retail sector to foreign retailers saying it will have a strong impact on investor sentiment and hurt the economy. A majority of industry players hoped that there would not be any rollback and the decision to put it on hold is temporary. “CII firmly hopes that this would not be a rollback and a quick consensus is reached. FDI in multi-brand retail would have multifarious advantages to farmers, small and medium enterprises, producers, consumers and government alike,” said Chandrajit Banerjee, director-general of the Confederation of Indian Industry (CII). Harish Mariwala, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), termed the government move disappointing and regressive. He urged the government to press ahead with the move and said 100% FDI in single brand retail should be permitted and it should consider 49% FDI in multi-brand retail instead of 51%. The government should also examine the proposal to allow FDI in multibrand retail in cities with a population of 15 lakh instead of the current proposal which pegs it at 10 lakh as well as the quantity to be sourced from small and micro enterprises. The government had made it mandatory for foreign retailers to source at least 30% of its requirements from Indian small and micro enterprises.

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