Government will allow FDI in retail

Retail in IndiaAfter hobbling on a proposal paper, released in July 2010 by the Department of Industrial Policy and Promotion (DIPP), to allow 51 per cent foreign direct investment (FDI) in multi-brand retail in India, the discussion seems to finally be reaching some destination.

The Union Finance Ministry has approved the Cabinet note on Foreign Direct Investment (FDI) in retail – which significantly seeks a 51 percent FDI permit in multi-brand retail, says a news report. The note also seeks to increase FDI in single brand retail from the present 51 percent to a 100 per cent. This echoes a proposal by a committee of secretaries (CoS) in July 2011, to allow 51% FDI in multi-brand retail and a hiking of the permissible limit cap in single brand retail.

However, a few riders comes with the approval like the investor in multi-brand retail company will have to make a minimum investment of $100 million initially. Also, out of this $100 million at least 50 per cent would have to be invested in back-end infrastructure like cold storage chains and logistics.

Still I think the move will surely give a new life to the struggling retail sector in India as a whole. What are your views and thoughts about this? share with us below.

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