Modi toes UPA line, okays FDI in multi-brand retail

Min FDI amount would be $100 m

Modi toes UPA line, okays FDI in multi-brand retail

In a major U-turn, the Narendra Modi government at the Centre decided to throw open the multi-brand retail sector up to 51 per cent to foreign investors, retaining a decision by the previous UPA government, which it had vehemently opposed on the grounds that it hurt millions of smalls businesses in the country.

The BJP had not only rejected the 2012 UPA decision to bring foreign direct investment in multi-brand retail, but in the run up to the Lok Sabha elections, had also said that it would overturn the decision if elected to power.

However, in a late Tuesday night development, the Ministry of Industry and Commerce merely uploaded on its website the decision to retain the UPA’s policy on multi-brand retail. It did not inform the press about it.

“FDI in multi-brand retail trading, in all products, will be permitted, subject to the following conditions that fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fisheries and meat products, may be unbranded,” the FDI policy document, released late on Tuesday, said.

“Minimum amount to be brought in as FDI by the foreign investor would be $100 million. At least 50 per cent of the total FDI brought in the first tranche of $100 million, shall be invested in ‘back-end infrastructure’ within three years,” the policy added. These were the same conditions as announced by the UPA.

The Delhi government was quick to oppose the decision saying the national capital did not require the entry of multi-brand in the retail sector at this juncture.

“The Delhi government will not allow the entry of Foreign Direct Investment (FDI) in the retail sector in the national capital. The stand of the Delhi government, which was communicated to the Department of Industrial Policy and Promotion of the Union Commerce and Industry Ministry, on January 14 2014, remains unchanged,” a statement said, quoting Delhi Chief Minister Arvind Kejriwal.

Reactions from other states was awaited as the decision came late on Tuesday night and was not covered majorly by media. Traders, the BJP’s main vote bank, expressed shock on the decision with the All India traders’ body Confedration of All India Traders (CAIT) saying that the BJP leaders had assured them to withdraw the UPA notification.

“We were expecting the government to reject the notification of allowing 51 per cent FDI in multi-brand retail, as was assured by all BJP leaders at various occasions during UPA regime. The CAIT is shocked with the development and will surely take up this matter with Union Finance Minister Arun Jaitley and others in the government,” said B C Bhartia and Praveen Khandelwal, National President and Secretary General, respectively, of CAIT.

Stores from other shores

The BJP govt retains previous UPA govt’s decision about FDI in retail

The BJP, while in Opposition earlier, had vehemently opposed the UPA govt’s move in 2012

Delhi govt rejects the Centre’s move, while decision from other states is awaited Traders’ body shocked over the govt’s sudden decision 

Narendra Modi or Rahul Gandhi? Who will win the battle royale of the Lok Sabha Elections 2019

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