Only four states and UTs have so far indicated their support for allowing FDI in multi-brand retail, a development which will further delay entry of global chains like Walmart and Carrefour in India.
“Till date, written communications, indicating support for foreign direct investment (FDI) in multi-brand retail trade, have been received from the governments of Delhi, Manipur and from Daman and Diu and Dadra Nagar Haveli,” minister of state for commerce and industry Jyotiraditya Scindia informed the Rajya Sabha in a written reply to a query.
The department of industrial policy and promotion (DIPP) had written to governments of all states and Union Territories on June 19 to elicit their views on the contentious issue. The Union cabinet had decided on November 24, 2011 to allow 51 per cent FDI in multi-brand retail, but the same could not be implemented in the face of strong opposition from UPA-ally Trinamool Congress and several state governments.
Scindia said there was no proposal to allow 100 per cent foreign direct investment in multi-brand retail. In the backdrop of the government facing flak from a section of industry and some global investors for policy inaction, the government has renewed its efforts to forge a consensus on opening the retail sector estimated to be over $ 600 billion. “No decision has been taken in the matter,” he said.
In reply to a different question, the minister said that the government has not taken any decision on the two proposals for 100 per cent foreign direct investment in the single brand retail.
While Swedish furniture major IKEA proposes to invest Rs 10,500 crore, UK-based footwear major Pavers wants to invest additional Rs 100 crore in the Indian market. Till May, the total FDI equity inflows in the single brand retail trade are meagre Rs 204.07 crore.
Muted response DIPP had written to governments of all states and UTs to elicit their views on the issue Union cabinet had decided on November 24, 2011 to allow 51% FDI in multi-brand retail Scindia said there was no proposal to allow 100 per cent FDI in multi-brand retail.
The Congress leadership will take another shy at opening multibrand retail to foreign chains, with the UPA coordination committee likely to be convened towards the end of the month specifically to smoothen the way for the long-pending liberalization move.
The meeting is expected to be attended by Trinamool Congress chief Mamata Banerjee who has been a big hurdle in the government’s plans to let in foreign retailers.
Ministry officials listed Maharashtra, Andhra Pradesh, Haryana, Uttarakhand, Assam and Jammu & Kashmir among states which have supported FDI in retail and said the chief ministers from these states, had made their stand public. While the government was hoping to push the FDI liberalization moves after the presidential polls, it received a setback when Samajwadi Party, along with the Left and Janata Dal (United), voiced their dissent.