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Rajasthan withdraws permission for FDI in multi-brand retail

Mohammed Iqbal
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CM sends letter to Union Minister reversing the earlier decision

Chief Minister Vasundhra Raje
Chief Minister Vasundhra Raje

Rajasthan has become the second State, after Delhi, to withdraw permission for foreign direct investment (FDI) in multi-brand retailing. The newly elected Bharatiya Janata Party Government has cancelled the approval given by the previous Congress regime in this regard.

Chief Minister Vasundhara Raje has written a letter to Union Commerce and Industry Minister Anand Sharma informing him of the State Government’s move to reverse the earlier decision to allow global companies to open their supermarket chains in Rajasthan.

Sources in the State Government confirmed here on Friday that the letter withdrawing the FDI approval had been sent to Mr. Sharma. State BJP spokesperson Jyoti Kiran Shukla described it as a “historic decision” that would protect small shopkeepers.

Rajasthan is one of the 12 States which had agreed to allow FDI in the retail sector. With Bharti-Walmart, Carrefour and Metro Cash & Carry already present in the wholesale segment in Jaipur and other big cities such as Jodhpur, Ajmer and Kota were gearing up to have multi-brand retail stores of global majors. However, the BJP---which defeated the Congress by securing an unprecedented 163 seats in the 200-member State Assembly in the elections held recently---is in principle opposed to the permitting FDI in multi-brand retail. The change of government has paved the way for the change in the previous regime’s decision.

Former Chief Minister Ashok Gehlot had given consent to the FDI policy’s implementation in the State after the Union Government permitted 51 per cent FDI in multi-brand retail trading in September 2012 and left its execution to the States.

The Aam Admi Party Government in Delhi had earlier this month revoked the decision to allow FDI in retail and told the Centre that it would not allow foreign supermarkets in the Capital as they would destroy the local markets and close down neighbourhood shops and kirana stores.


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