India has one of the most complicated FDI regulations for the retail sector in the world
In its just released 2019 election manifesto, the party is silent on its stand on FDI in supermarkets
New Delhi: The manifesto of the ruling Bharatiya Janata Party (BJP) for the upcoming general election released on Monday is silent on its position on FDI in supermarkets unlike in 2014, when it explicitly opposed the idea and followed it up by prohibiting FDI in multi-brand retail stores during its tenure.
“There could be a subtle shift in stance. We need to wait and watch," said a senior executive of a retail company speaking under condition of anonymity.
India has one of the most complicated FDI regulations for the retail sector in the world. Not only it has different set of regulations for online and offline retail stores, it further categorises online retail retail based on marketplace and inventory models. Brick and mortar stores are further categorized as single brand retail, multi-brand retail and wholesale stores. While India allows 100% FDI in single brand retail stores, wholesale stores and e-commerce marketplaces, it prohibits FDI in inventory based e-commerce sites and multi-brand retail stores. It also has complicated set of rules on cross-ownership among retail companies.
In 2012, the Congress led United Progressive Alliance government had allowed 51% FDI in multi-brand retail stores but the Narendra Modi government following up on its promise in the 2014 manifesto put the decision in cold storage after coming to power though it never formally rescinded it through a government notification.
In its 2014 election manifesto, the BJP had said it would allow FDI across sectors wherever needed for job and asset creation, infrastructure, and acquisition of niche technology and specialized expertise, but not in supermarkets. “The BJP is committed to protecting the interest of small and medium retailers, SMEs and those employed by them," it added.
In its just released 2019 election manifesto, the party is silent on its stand on FDI in supermarkets. However, its focus has shifted to welfare for small traders who are considered a key vote bank of the BJP.
“We intend to establish a National Traders’ Welfare Board as well as announce a National Policy for Retail Trade. To protect the interests of small traders, we will provide an accident insurance of 10 lakh rupees to all the traders registered under GST," it said in the manifesto.
It also promised to create a scheme to give merchant credit card to registered merchants, on the lines of Kisan credit card.
The government in January renamed the Department of Industrial Policy and Promotion (DIPP) as Department for Promotion of Industry and Internal Trade (DPII), giving it additional responsibility of welfare of traders and their employees from the consumer affairs ministry to the commerce ministry,