The Aam Aadmi Party (AAP) Government in Delhi has written to the Department of Industrial Policy and Promotion (DIPP) formally disapproving the setting up of Foreign Direct Investment-funded multi-brand retail stores in the State. Delhi is now set to become the first State to withdraw its approval.
This means that global retailers such as Tesco and Walmart will not be allowed to set up shop in Delhi even after they get all the required clearances from the Centre.
The Centre has allowed 51 per cent FDI in multi-brand retail.
“The DIPP is processing the application for withdrawal of approval for FDI in retail given by the Delhi Government,” a DIPP official told
Opposing FDI in retail was part of the AAP’s 18-point agenda that it submitted to the Congress before agreeing to take its support for forming the Government in Delhi.
The previous Delhi Government led by the Congress had approved FDI in multi-brand retail.
Losing Delhi as a potential market for retail outlets would be a big blow to foreign retailers as metros offer tremendous opportunities to the segment.
“With Delhi deciding to opt out, the FDI retail policy is likely to lose some sheen. But there are 11 other States, many of them huge, where stores can still be set up,” the official added.
So far, 12 States have agreed to allow foreign multi-brand retailers to set up stores. These include Himachal Pradesh, Maharashtra, Andhra Pradesh, Haryana, Rajasthan and Manipur.
Interestingly, Karnataka decided to give its approval to multi-brand retail in June last year after the Congress came back to power in the State defeating the BJP in the Assembly polls.
The Centre opened up the multi-brand retail segment to foreign retailers in September 2012. Tesco is the only foreign retailer that has applied to the DIPP so far for opening stores in India in partnership with the Tata Group.
The AAP has been opposed to FDI in retail as it feels that it would lead to loss of livelihood for millions. “Aam Aadmi Party strictly opposes FDI in retail because if it enters into the retail sector, then crores of small-scale Indian businessmen will come on the road, as they will lose their business and their livelihoods,” Kejriwal had opined in a letter written to Delhi traders.
amiti.sen@thehindu.co.in