New Delhi -°C
Today in New Delhi, India

Oct 22, 2019-Tuesday
-°C

Humidity
-

Wind
-

Select city

Metro cities - Delhi, Mumbai, Chennai, Kolkata

Other cities - Noida, Gurgaon, Bengaluru, Hyderabad, Bhopal , Chandigarh , Dehradun, Indore, Jaipur, Lucknow, Patna, Ranchi

Tuesday, Oct 22, 2019

Govt to allow 51% foreign investment in retail business

The government has moved a formal proposal to allow foreign direct investment of up to 51% in multi-brand retail stores although with a few riders. At present, FDI in multi-brand retail business is prohibited in India. Gaurav Choudhury reports.

business Updated: Jun 10, 2011 01:06 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times
Hindustantimes
         

The government has moved a formal proposal to allow foreign direct investment of up to 51% in multi-brand retail stores although with a few riders. At present, FDI in multi-brand retail business is prohibited in India.

The large deep discount stores, such as Walmart, Tesco and Carrefour, will be allowed only in 10-lakh-plus cities and only in those states which allow FDI in multi-brand retail.

According to the proposal, piloted by the department of industrial policy and promotion last month, at least 50% of the total investment should be made for creating back-end infrastructure, such as building cold storage chain and warehouses.

And the retailers will have to keep the RBI and the Foreign Investment Promotion Board in the loop in this regard.

The proposal is expected to come up for cabinet approval in the next few weeks.

But the government may have face tough opposition before fully opening up the market to global retailers.

Ravi Shankar Prasad, BJP leader, said the giant stores would affect the neighbourhood mom-and-pop stores and street vendors.

"We oppose it because it will lead to large-scale unemployment," Prasad told HT.

But as a safeguard measure, the government has proposed riders like these stores will have to sell at least one-third of their goods to small retailers and source at least 30% of manufactured items from small and medium enterprises.

First Published: Jun 10, 2011 00:57 IST

top news