Asserting that a decision on allowing foreign direct investment (FDI) in multi-brand retail will be taken soon, Union Commerce and Industry Minister, Anand Sharma on Wednesday said whatever is done would be in the supreme national interest.
“Policy formulation is a careful calibrated exercise. Once recommendations formally reach my table, we will take early and appropriate policy decision,” Mr. Sharma said in the Rajya Sabha during Question Hour.
Replying to concerns expressed by members about job losses following opening up of the sector to foreign retailers, Mr. Sharma said any decision would be in supreme national interest and create millions of jobs across the country. “A group of Secretaries headed by Cabinet Secretary, Ajit Kumar Seth last month, made specific recommendations which are in the interest of all stakeholders, including farmers,” he added.
Mr. Sharma said CoS has recommended that at least 50 per cent of the investment and jobs go to rural areas and the entities with FDI should source at least 30 per cent of their requirements from the MSME sector. A minimum investment of $100 million has been recommended, he said. At present, India allows 51 per cent FDI in single brand retail and 100 per cent in cash and carry format of the business.
The Department of Industrial Policy and Promotion (DIPP) had last year in July floated a discussion paper on opening of the politically sensitive multi-brand retail. Only four per cent of India’s retail is in the organised sector.
The DIPP had received 175 suggestions from different stakeholders, like industry chambers, retailer associations and farmers bodies. “There were mixed responses. The industry chambers like CII and FICCI supported the proposal while some retailers associations opposed it,” he said.
The suggestions were examined by a committee and later CoS came up with recommendations.
India, which is ranked as the second largest producer of food grains and vegetables and fruits, has post-harvest losses of up to 35-40 per cent due to lack of adequate infrastructure, like cold storage facilities and processing. “Opening up of single brand retail and wholesale business to FDI has helped in attracting investments and creating employment. India needs to strengthen its back-end infrastructure to check post harvest losses,” he added.