The government may have relaxed foreign investment norms in multi-brand retail in India through a fresh set of rules, but global superstore chains are unlikely to set shop till Parliament settles a looming uncertainty over the change in laws.
The amendments — mandatory for the rollout of foreign direct investment (FDI) in multi brand retail — will be tabled in Parliament for 30 working days within which the Opposition can press for vote to reject the change in rules of Foreign Exchange Management Act (FEMA) or scrap the entire policy.
CPI(M) leader Sitaram Yechury told HT, “These new amendments will be subject to the same (voting) and the UPA has got itself in another tangle.”
Economic affairs secretary Arvind Mayaram on Wednesday said that government has notified changes in the FDI policy, paving the way for larger overseas investments in sectors such as multi-brand retail and telecom.
Not a single superstore has set shop in India even after a year of opening up the sector for overseas investors with multi-national companies seeking clarification on a host of details.
Last month the government relaxed investment rules in multi-brand retail, significantly easing the condition that global giants will have to procure about a third of the goods that they sell in India from local small firms and artisans.
It also allowed the global chains to open stores in smaller cities by removing restriction that only the 53 urban centres — with a minimum population of one million — can house such supermarkets.