The Finance Minister, Mr Pranab Mukherjee has assured foreign investors that foreign direct investment (FDI) would soon be allowed in multi-brand retail.
“A consensus on allowing FDI in multi-brand retail is being evolved and will be operationalised in the near future”, Mr Mukherjee said in his address at the India Investment Forum in New York.
Currently, foreign investment is not allowed in multi-brand retail. In the case of single-brand outlets, foreign investment is allowed up to 51 percent. In cash and carry or wholesale trade, up to 100 per cent is allowed.
Mr Mukherjee’s remarks are expected to provide some comfort to many foreign retailers who were concerned over the Government’s yo-yo approach towards allowing FDI in multi-brand retail.
With almost two months having lapsed since the Committee of Secretaries (COS) recommended that FDI upto 51 percent be allowed in multi-brand retail, there are apprehensions that the long-awaited multi-brand retail policy may have been put on the back-burner.
The Union Cabinet is yet to consider the recommendations of the COS.The in-principle approval of the COS came with conditions: Foreign retailers will have to dedicate atleast 50 percent of their proposed investments to back-end supply chain infrastructure. They would further have to commit a minimum FDI of $ 100 million.