India is examining a proposal to allow foreign direct investment (FDI) in retail trade industry and ease the norms for overseas capital in the construction sector, Commerce Minister Kamal Nath said on Wednesday.
"I have begun consulting industry on foreign direct investment in retail trade. We should be out with a policy in one or two months," Nath told reporters on the sidelines of an infrastructure conference.
"In construction sector, I am not interested in investments for acquisition or trading in land. I want incremental investment, new technologies to come in so that the cost of commercial property becomes cheaper," the minister said.
The Government presently permits foreign investment in real estate as long as the minimum land acquired for such projects is 100 acre. The proposal now is for evaluating and approving projects on the basis of construction.
"What's the point if commercial space does not become cheaper? Merely acquiring land serves no purpose," the minister said.
According to Nath, only two per cent of India's retail trade sector was in the organised sector and out of the remaining 98 per cent, close to 50 per cent was accounted for by subsistence, family-run small businesses.
{{/usCountry}}According to Nath, only two per cent of India's retail trade sector was in the organised sector and out of the remaining 98 per cent, close to 50 per cent was accounted for by subsistence, family-run small businesses.
{{/usCountry}}"Our idea is not to disturb small and tiny retailers who dominate the industry. Any change would only help up get incremental investment in large stores and chains," he said.
Commerce Ministry officials said Nath had a meeting with a section of the stakeholders on Wednesday on the proposed foreign investment policy on retail trade, including Shoppers' Stop, Pantaloon, Crossroads, RPG Retail and Trade.