We will consider national interest while deciding on retail FDI: Sharma

Posted By: Religare
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The Minister for Commerce and Industry Mr. Anand Sharma has said on Thursday that the government will first consider national interest before taking any decision on opening multi-brand retail to FDI. He also pointed out that the government has received some "valuable" suggestions on issue. Speaking on the matter to the reporters he said, "We have received valuable inputs and we will form an opinion based on what is in the larger interest of the country". It is worth noting that the Department of Industrial Policy and Promotion (DIPP) headed by Mr. Sharma had released a concept paper in July initiating a debate on the politically sensitive issue of allowing foreign direct investment in the multi-brand retail. Various stakeholders and wings of the government have submitted their inputs on the issue over the due course of time. The concept paper had called for creation of back end logistics by the foreign retail stores as one of the main conditions for opening of the sector to FDI. Adding to the matter Sharma said, "Surely, India is interested in creating the complete value chain, particularly investments in back end infrastructure, and ensuring that the value chain creates job opportunities". The various stakeholders who had submitted their suggestions include the likes of various business chambers and companies such as WalMart India and French retail major Carrefour. The government has now constituted a panel of senior officials to look into the suggestions. At present India's multi-brand retail sector is dominated by mom & pop stores and employs nearly 33 million people. Currently no FDI is allowed in this sector. On the other hand 51 per cent FDI is allowed in single brand retail, 100 per cent FDI is allowed in wholesale cash and carry format business. The industry has for long been pitching for allowing FDI in retail sector but the issue had been marred by political resistance on account of the fear that allowing global players lead to the demise of small 'mom and pop' (kirana) stores in the country hence hurting the lively hood of millions. The discussion paper has also pointed out that the lack of proper infrastructure like cold chain and warehousing in India leads to the loss of agri products, fruits and vegetables worth more than Rs one lakh crore every year.

Read more about: minister, anand sharma
Story first published: Friday, October 1, 2010, 18:19 [IST]
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