New Delhi: Government on Wednesday said it will take an early decision on opening up multi-brand retail sector for FDI after it formally gets minutes of the recommendations of top secretaries on the issue.
“(Policy formulation) is a careful calibrated exercise.... Once recommendations formally reach my table...we will take early and appropriate policy decision,” commerce and industry minister Anand Sharma said in Rajya Sabha.
Replying to concerns raised by members on issues like job losses following opening up of the sector to foreign retailers, Sharma said the decision will be in “supreme” national interest and create millions of jobs across the country.
He said a group of secretaries headed by cabinet secretary Ajit Kumar Seth last month made specific recommendations which are in interest of all stakeholders, including farmers.
He said the secretaries have recommended that at least 50% of the investment and jobs go to rural areas and the entities with FDI should source at least 30% of their requirements from the MSME sector. They have recommended that the minimum investments should be $100 million.
India allows 51% FDI in single brand retail and 100% in cash and carry format of the business.
In July 2010, the Department of Industrial Policy and Promotion (DIPP) floated a discussion paper on opening of the politically sensitive multi-brand retail.
Global retail giants like WalMart are eying India’s retail sector, dominated by mom and pop stores. Only 4% of India’s retail is in the organized sector.
The DIPP, in commerce and industry ministry, received 175 suggestions from different stakeholders, like industry chambers, retailers associations and farmers bodies.
“There were mixed responses,” Sharma said, adding industry chambers like CII and Ficci supported the proposal while some retailers associations opposed it.
The suggestions were examined by a committee and later top secretaries came out with recommendations.
India, which is the second largest producer of food grains and vegetables and fruits, suffers huge post-harvest losses of up to 35-40% due to lack of adequate infrastructure, like cold storage facilities and processing.
Sharma said that opening up of single brand retail and wholesale business to FDI has helped in attracting investments and creating employment.
He said India needs to strengthen its back-end infrastructure to check post harvest losses.