The Central Government, on Tuesday, strongly rejected the opposition BJP claim that international investment protection treaties and undertakings under WTO would override the right of the State government to reject entry of multi-national food chains under the newly-approved 51 per cent foreign direct investment (FDI) in multi-brand retail policy. An official spokesman of the Commerce and Industry Ministry said here that it would be the prerogative of the States to allow a multi-brand store.
The policy itself was a national policy, and could potentially be applicable to all the States that were desirous of implementing it. The local and State-level regulations which governed shops and establishments were the prerogative of the respective State governments, the spokesperson added. “The policy explicitly acknowledges this position. The opening up of FDI in multi-brand retail trading is a liberalisation measure and remains so with all the conditionalities, given the fact that at present FDI in multi-brand retail trading is not allowed in India. The decision does not violate any commitments/obligations arising out of India’s international agreements,” the spokesperson said.
Market access
Giving further details, the spokesperson said market access, in the context of FDI policy, implied the ability of a foreign investor to enter the investment space in India and the limitations thereon. A foreign multi-brand retail investor could invest in India only after the government decision was notified. An official release said that the Bilateral Investment Promotion & Protection Agreement (BIPA) was a post-establishment investment agreement. This implied that once an investor entered the country, that investor must be treated the same as a domestic investor unless the limitations to national treatment were clearly spelt out at the pre-establishment stage. The FDI policy was a pre-establishment instrument and, therefore, not covered by BIPA, it added.
Pre and post
Similarly, for the Comprehensive Economic Partnership Agreement (CEPA), it said under these agreements, India had taken both pre and post establishment commitments. In the pre-establishment commitments, the FDI policy has been bound, which means that any rollback would require consultations with the partner country and could entail quid pro quo in terms of concessions in other areas. Within the FDI policy, commitments may be taken only in some specified sectors (positive listing). Since FDI in multi-brand retail trading was not allowed when these agreements were negotiated, none of these agreements is affected by the recently approved policy. Moreover, state and local regulations are not a part of such commitments.
The spokesperson said India has not undertaken any commitments in this area under the General Agreement on Trade in Services (GATS). As such, there is no impact of the policy on our commitments under the WTO. Investment is not a part of WTO disciplines except through Mode 3 under GATS.
Keywords: credit policy review, steep hike, inflation, economic reforms, Indian economy, reform process, diesel price hike, FDI in retail
as the old saying goes" Aakasa Ganga came down on to the head of SIVA in Kailasam (not a degrading act?!?!)becoming Siva Ganga. Siva let Ganga to flow on to the Himalayas, there She started all the way down to the plains then continued flow and in to the sea There She goes further down to Patala there becoming Paataala GANGA". THAT will be the status our Indian Economy soon, due to all foreigh hands playing into the wealth of Indian Nation. Only a pseudo-patriot can call this a great for Nation. God save Bharath i.e. India.
It is very strange that the UPA 2 inspite of having so many knowledgable people has failed to make people aware of the FDI issue. I dont understand what prime minister is actually trying to do?? This FDI can really make Indian economy back on track, but because of the poor management skill of the central govt.such a big reforming step soon going to be disappeared leaving the economy in a wrong track. It is the time where Mr. Manmohan Singh has to try to make this FDI to be successfulone,rather than protecting their allies for another 1.5 years. If BJP can do it, BJP has every wright to do this reformation. Indian aam admi dont want a Govt. which has to think so many things to implement a preventive measure which can be beneficial for the country. Enough is enough, in other words,if UPA can bring FDI, then they have the wright to stay, but if they cannot , then they dont have the wright and they should allowpeople / party who can bring this reformation and make the country growing.
A very bold step indeed! Though it will not take away the rights of any State it will certainly force about 50 million odd small/medium shop keepers to shut down their shops. To help them over come this hurdle, our leaders may think in terms of giving food coupons to these 50 million men & women and their families as it is followed by some European countries.
Vegetables: Instead of encouraging FDI on retail sector we should encourage our energetic young business people to start such big walmart type stores. That is good in the long run.
Allowing FDI in agricultural products in dangerous.
For the other daily Consumables otherthan Vegetables: We can even allow 100% FDI. It should be a competitive area.
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