Protest in Parliament as Govt allows FDI in retail
Government on Friday informed Parliament that it has allowed 51% FDI in multi-brand retail, a decision which faced strong criticism, including from key UPA ally Trinamool Congress.delhi Updated: Nov 25, 2011 14:13 IST
Government on Friday informed Parliament that it has allowed 51% FDI in multi-brand retail, a decision which faced strong criticism, including from key UPA ally Trinamool Congress.
In a statement, Commerce and Industry Minister Anand Sharma said both in the Lok Sabha and Rajya Sabha that the policy on single brand retail has also been liberalised, removing the 51% cap on Foreign Direct Investment (FDI).
Allowing FDI in multi-brand retail, which is dominated by neighbourhood stores, will be subject to riders including a minimum investment of $100 million (Rs 5,200 crore).
At least 50% of the investment would in the back-end infrastructure like cold storage, packaging and other logistics.
The global retail chains like Walmart and Carrefour will have to source at least 30% of their requirements from small industries. Besides, they will be allowed only in cities with one million people.
The entire Opposition and Trinamool Congress protested against the decision by creating uproar in both the Houses.
Trinamool Congress members joined the Opposition and trooped into the Well shouting slogans against the decision.
In the Rajya Sabha, Sharma's statement giving details of the decision was torn into pieces by CPI-M and BJP members.
In the din, Sharma could not complete his statement and both Lok Sabha and Rajya Sabha were adjourned till Monday.
While allowing 100% FDI in single brand retail, the statement said the products sold should be of a single brand and should be sold under the same brand in one or more countries, other than India.
The single brand product retailing would cover only products, which are branded during manufacturing. The decision also made it mandatory that the owner of the brand will be a foreign investor.
"In respect of proposals involving FDI beyond 51%, 30% sourcing would mandatorily have to be done from SMEs/village and cottage industries, artisans and craftsmen," the statement said.
Small industries have been defined as industries which have a total investment in plant and machinery not exceeding $1 million (Rs 5.2 crore).
The statement says that in case the valuation of small industries exceeds from the prescribed limit, the industry shall not qualify as small industry for the purpose.
First Published: Nov 25, 2011 12:27 IST