The Centre has ruled out re-visiting the Cabinet's decision to allow foreign direct investment (FDI) in multi-brand retail. However, in view of the strong opposition to the move from certain quarters, indications are that the formal notification of the Cabinet decision may get delayed.
“The Ministry is working on the guidelines to implement the decision. The rules will be framed which answer the issues raised and decisions taken in the Cabinet,” Mr P.K. Chaudhery, Secretary, Department of Industrial Policy and Promotions (DIPP), said on Thursday. The DIPP is the nodal department of the Commerce Ministry for FDI policy.
He refused to speculate on the time line for issuance of guidelines, though the Government last Friday announced that the press note will be issued this week.
Admitting that States opposing the move could block the entry of foreign investors in the area, Mr Chaudhery said that State Governments were consulted on the issue, and given “ample opportunity” to respond on the proposal. Nevertheless, officials admitted that the DIPP did not write directly to the State Governments while the policy was being formulated.
He, however, said that States were consulted when the issue was debated by the Standing Committee of Parliament attached to the Commerce Ministry. Later, when the discussion paper was placed on the Web site, States, as stakeholders, had the opportunity to respond, he pointed out.
He also clarified that the Government will not be revisiting the decision in light of the opposition being raised to the move. Asked whether the Government will initiate a fresh public debate on the proposed guidelines before notifying them, Mr Chaudhery said, “If my answer to you was yes, that means I am conceding that we will revisit the policy. No.”
Talking about the controversial norm of sourcing 30 per cent from Indian small and medium enterprises, he said that this will not violate any international commitment including the General Agreement on Trade in Services (GATS). Even now, a multinational like IKEA is sourcing 68 per cent of its textile requirement from India, he added.
The Secretary clarified that if there is fear of excessive import or dumping of foreign goods, there are anti-dumping laws or provisions under the export-import policy. He also said that linkage of import with FDI is completely misplaced.
He ruled out any sectoral regulator for retail trade. He explained that the Competition Commission of India (CCI) was there to take action against predatory pricing.
“CCI will watch the situation and take cognisance, if required,” Mr Chaudhery stated.