DIPP floats discussion paper on FDI in multi-brand retail

Looks like the UPA is keen on pushing through key reforms that had been pushed to the backburner during the Congress-led coalition's previous five-year rule owing to stiff opposition from allies like the Left parties. Hot on the heels of announcing a partial deregulation in fuel prices, the Centre is now contemplating opening up the retail sector. The Department of Industrial Policy and Promotion (DIPP), which falls under the Commerce & Industry Ministry, is seeking comments from various stakeholders on whether FDI in multi-brand retail should be allowed or not. The paper, however, remains silent on the quantum of FDI cap. The draft paper had proposed 51% FDI in multi-brand retail.

"FDI in retail may be an efficient means of addressing the concerns of farmers and consumers. Opening FDI in retail could also assist in bringing technical know-how to set up efficient supply chains, which can act as models of development," the DIPP said in a discussion paper. "It would also assist in lowering consumer prices/inflation," the paper said. The Commerce Ministry has sought comments by July 31.

At present, FDI in multi-brand retail is banned in India. However, the Government allows 51% FDI in single brand retailing and 100% in wholesale trade. A financial newspaper reported last week that the DIPP has sought the views of the Finance Ministry and the Department of Consumer Affairs for amendments to the guidelines for FDI in wholesale trading.