Not possible to allow FDI in multi-brand retail: Nirmala Sitharaman
New Delhi: The government on Wednesday said it will not be possible to allow foreign direct investment (FDI) in multi-brand retail trading in India unless small traders and farmers are “empowered” and can face market competition.
“At the moment, India can create several Walmarts of its own. We welcome anybody... but if some way this dialogue is moving towards, why not (FDI in) multi-brand retail in India? My answer is, not yet,” commerce and industry minister Nirmala Sitharaman said at The Economist India Summit 2016.
She was replying to the question as why to India is not permitting FDI in retail trade.
Explaining the “thinking behind” this, the minister said there is an issue of last-mile connectivity, adequate infrastructure and financial inclusion of those segments such farmers and small traders.
These things were absent all the while but now this government is making every effort to bridge these gaps, she said.
“If only that happens, and if they (farmers and small traders) are adequately empowered to tackle the market themselves... But today we are trying to bridge those gaps. We are still not ready to have them and face a competition where there would not be a level playing field,” Sitharaman added.
Although the current FDI policy permits foreign players to hold 51% stake in an Indian company, the government had opposed foreign investment in this segment in its election manifesto.
The last government had cleared the UK-based Tesco’s proposal in multi-brand retail.
On a question that there are no big supermarkets in India, Sitharaman said, “Our supermarkets are friendlier than the faceless supermarkets I have been in the West.”
She also said that the government is taking steps to improve ease of doing business in the country. “There was a long list of archaic laws... over 1,200 laws have been removed just unceremoniously and taken out of the system because you do not need them,” she added.
On a question about a law on sedition, the minister said there is a discussion going on in court. “We will certainly be eager to hear about it”.
“The freedom of speech even to the extent that critical appraisal of government has never been contained in India, never stifled in India,” she said.
If there is problem with an act or a certain code in the Indian Penal Code, the government is willing to look at it, she said. “But that can not be an expression to undermine the state itself”.
Criticizing the government is one thing, but nobody should undermine the state and the Constitution, she said.