Govt set to tweak rules for FDI in multi-brand retail

Commerce Minister Anand Sharma indicated on Thursday that the government is ready to tweak guidelines for foreign direct investment (FDI) in multi-brand retail to address concerns of global supermarket chains such as Walmart, Carrefour and Tesco.

"The objective of the policy is to encourage investment, create jobs and benefit the farmers and consumers. Therefore, we have sufficient space to address those concerns, bring in clarity, and an early and appropriate view will be taken so that the guidelines can accordingly be given out," Sharma said after a meeting with retail giants.

Sharma held detailed discussions on the issue with representatives of multinational retail giants and domestic companies, including the Aditya Birla Group and Bharti Enterprises.

"Some questions have been frequently raised, there has been speculation, and also misgivings. It was important for the government to hear where are the areas or the issues which may require some more clarity," he added.

According to the current FDI policy in the retail sector, 30 per cent of products sold by single-brand retailers are to be preferably sourced from small and medium enterprises (SMEs). On the other hand, in multi-brand segment, it is mandatory for the company to procure 30 per cent from SMEs.

"The industry raised two to three major points like the 30-per cent sourcing issue. We have said that it should be preferable and not mandatory. Industry cannot buy everything from SMEs," Bharti Enterprises vice-chairman and managing director Rajan Bharti Mittal told reporters.

The government is pushing ahead with its exercise to streamline the process for attracting FDI.

According to sources, the Department of Industrial Policy and Promotion (DIPP) secretary Saurabh Chandra has written to the secretaries of 17 ministries to discuss the road map prepared by the Arvind Mayaram Committee for hiking FDI caps across sectors.

In association with Mail Today