FDI in Multi Brand Retail...Govt Clarifies.

The policy rollout will cover only cities with a population of more than one million (as per 2011 census). There are only 53 such cities; there are 7935 towns and cities in India overall.

The Government’s attention is drawn to reports in some section of media on various elements of FDI policy in multi brand retail.

The policy cleared by Union Cabinet on 24th November stipulates that FDI in multi brand retail will be allowed upto 51% foreign equity through the Government approval route, subject to adequate safeguards for domestic stakeholders.

The policy rollout will cover only cities with a population of more than one million (as per 2011 census). There are only 53 such cities; there are 7935 towns and cities in India overall.

The policy mandates a minimum investment US$100mn with at least half the amount to be invested in back end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. "This is expected to considerably reduce the post harvest losses and bring remunerative prices to farmers," the Commerce Ministry said.

Sourcing of a minimum of 30% from Indian micro and small industry having capital investment of not more than US$1mn has been made mandatory, the Commerce Ministry said. "This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation," it added.

The FDI policy is an enabling framework and it remains the prerogative of the states to adopt it, the Commerce Ministry said. On ground implementation of policy will clearly be within the parameters of state laws and regulations, it said.

A strong legal framework in the form of Competition Commission is available to deal with any anti-competitive practices, including predatory pricing, the Commerce Ministry said.

Source : indiainfoline.com