The Centre is likely to give a go ahead to 51 per cent foreign direct investment (FDI) in multi-brand retail after the conclusion of the Parliament session, although with a changed definition of back-end infrastructure investment.
“We are in the final stages of putting in place a Cabinet note, being prepared by the Industry Ministry led by Department of Industrial Policy and Promotion, for consideration of the Cabinet. We are working at a fast pace to ensure that investment momentum remains upbeat. The massive investment of funds required in the rural belt and the back-end infrastructure will form the basis of the FDI permission for multi-brand retail,'' a senior Ministry official said.
Union Commerce and Industry Minister Anand Sharma, when asked about the issue, said, “We are aware of the global economic climate and need for India to grab the opportunities coming its way. We will keep the sensitivities of all sections in mind whenever any policy is framed in future.''
On its part, the DIPP has decided to include three new areas as part of back-end infrastructure investment. The new areas of investment are: design improvement, quality control and packaging of products. The move will provide foreign retailers greater flexibility in structuring their India investments in the sector.
The Committee of Secretaries, while giving its nod for up to 51 per cent FDI in multi-brand retail, had recommended that at least 50 per cent investment had to be mandatory in back-end infrastructure. The minimum investment required would be $100 million.