Hinting at opening up of the multi-brand retail sector to foreign direct investment (FDI), the government on Wednesday said it was committed to come out with a policy on this issue but foreign investment must be linked with the development of back-end facilities.

“The policy we come out with must involve back-end to front-end linkages in terms of capacity augmentation and investment,” Minister of State for Commerce and Industry Jyotiraditya Scindia said while speaking at the India Leather Summit organised by the Council for Leather Exports (CLE).

He said the Department of Industrial Policy and Promotion (DIPP) was evaluating the expert committee report which went into stakeholders’ comments on the discussion paper floated in July last year. “We are now evaluating it along with other Ministries. We have committed to coming out at least with a policy on FDI in retail in the near future,” Mr. Scindia said.

At present, FDI is allowed up to 51 per cent only in single brand retail and 100 per cent in the wholesale cash-and-carry segment.

Retail giants like US-based Wal-Mart and French Carrefour are pitching for opening of the retail sector and are keen to enter the multi-brand segment. Some of them like WalMart and Carrefour have already started

their cash-and-carry stores in the country.

Leather exports to be doubled

The government and the industry are working together to double India's leather exports to $8.5 billion in the next three years and the strategy includes setting up of seven mega clusters in different parts of the country.

Speaking on the occasion, Council for Leather Exports chairman M. Rafeeque Ahmed said leather exports are estimated at $3.8 billion for 2010-11.

A strategy paper of the Commerce Ministry, which was released in February, has set the target of doubling these exports by 2013-14. The paper has recommended government intervention for improved capital, credit access, marketing, support for environment projects, and development of seven mega leather clusters.

The leather industry, which employs 2.5 million people, is grappling with several issues, including shortages of raw material such as hides and skins.

“We are asking for 80 per cent subsidy on land, road and infrastructure and budgetary allocation of Rs. 125 crore for each cluster,” Mr. Ahmed said.

The government had announced setting up of mega clusters in Uttar Pradesh, Haryana, Rajasthan, West Bengal, Bihar, Tamil Nadu and Andhra Pradesh.

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