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Govt in huddle over retail FDI

Amid rising onion and vegetable prices, the debate on opening up foreign direct investment (FDI) in multi-brand retail and defence production has gathered steam with senior ministers holding discussions on various proposals.

business Updated: Dec 23, 2010 21:42 IST
HT Correspondent

Amid rising onion and vegetable prices, the debate on opening up foreign direct investment (FDI) in multi-brand retail and defence production has gathered steam with senior ministers holding discussions on various proposals.

Finance minister Pranab Mukherjee, home minister P Chidambaram, defence minister AK Antony and commerce and industry minister Anand Sharma on Wednesday held discussions on the proposals to open up FDI in multi-brand retail and defence production.

"We will be having more meetings. Policy (formation) is dynamic...we are very progressive and forward-looking," Sharma told reporters here.

The department of industrial policy and promotion (DIPP) floated a discussion paper last month making a strong pitch for throwing the retail sector open to FDI. The move is expected to allow international giants such as Wal-Mart, Tesco and Carrefour to set up mega stores in one of the world's hottest-growing economies.

The paper said FDI in retail may be an efficient means of addressing the concerns of farmers and consumers.

The food and consumer affairs ministry has favoured opening up FDI in multi-brand retail with a 49% cap.

The finance ministry, while not taking any position on the issue, had said the paper "comprehensively captures the scenario in multi-brand retail in the Indian context."

There was no connection between skyrocketing onion prices and FDI in multi-brand retail, Sharma said, adding, the demand for opening up the sector has been gaining currency in view of the yawning gap between wholesale and retail prices.

The government has followed a "progressive approach and the liberalisation (in policy) has been incremental," the commerce minister said.

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