Referring to the withholding of the Cabinet decision on allowing 51 per cent foreign direct investment (FDI) in multi-brand retail, Union Commerce and Industry Minister Anand Sharma on Tuesday said the issue had been dragged into partisan politics, something that undermines the investor confidence.
Speaking at the round table on “Ensuring strong growth in the post crisis global economy”, organised on the occasion of IMF chief Christine Lagarde's visit to India, Mr. Sharma said: “We have been trying to create the consensus. We got the Cabinet decision both on single-brand and multi-brand retail but the issues got dragged into partisan politics which undermines investor confidence.
“We had the consensus of the stakeholders but the political consensus is always important. My urging to others is that let the States have the right to freedom for those who don't want to go in for FDI in multi-brand retail. At the same time, India desperately needs to create an integrated value chain to deal with the huge issue of post-harvest losses of up to 40 per cent.
“If we do that, I think we will take a positive step forward,” he said.
Mr. Sharma's remarks came close on the heels of assertion by West Bengal Chief Minister and Trinamool Congress chief Mamata Banerjee that her party would go by its manifesto which talked of not allowing FDI in multi-brand retail.
Cotton export row
About the cotton export row, Mr. Sharma, who also holds Textiles portfolio, said India would not be able to ship the natural fibre abroad unless it has surplus. “We will be in a position to export cotton, when we have that surplus again,” he said.
On March 5, the Commerce Ministry had imposed a ban on cotton exports on evidence of hoarding in warehouses abroad and shortage in the domestic market. The government had lifted the ban subsequently under pressure from political parties and its allies. However, the government has allowed cotton exports of only registered contracts made till March 4 after scrutiny.
India, which is the second largest producer of cotton in the world, had issued registration certificates for 130 lakh bales (170 kg each) of cotton before the prohibition and out of that 95 lakh bales were shipped. Stating that natural fibre arrivals would be low after March, Mr. Sharma said: “We have a cotton textiles industry. We cannot have a situation where there is no value-addition,” he added.