‘Retail, construction discussed at FDI review meet’
The prospect of permitting 100 per cent FDI in multi-brand retail is also being evaluated although a decision on this is needed to be taken at the highest level of the political establishment, especially since the BJP had earlier opposed the regime. The prospect of permitting 100 per cent FDI in multi-brand retail is also being evaluated although a decision on this is needed to be taken at the highest level of the political establishment, especially since the BJP had earlier opposed the regime.
Finance minister Arun Jaitley on Monday held a meeting to review the country’s foreign direct investment (FDI) regime, aimed at making it easier for overseas companies to invest here and create jobs, sources said.
While the government remained non-committal on the outcome of the meeting, Jaitley is believed to have discussed a few proposals for further liberalisation in certain sectors including retail and construction.
The government, the sources added, is examining allowing 100 per cent FDI in single-brand retail through the automatic route, giving conditional permission for up to 100 per cent FDI in multi-brand retail from 51 per cent now and approval for selling a certain percentage of locally-produced non-food items, along with the edible ones. In construction, it is considering allowing FDI in even undeveloped and underdeveloped plots in a project, albeit with certain conditions.
At present, up to 51 per cent FDI is allowed in multi-brand retail, via the government route. In single-brand retail, while up to 100 per cent FDI is allowed, investment beyond 49 per cent needs government approval. Up to 100 per cent FDI is permitted (with government approval) in trading — including through e-commerce — of food items produced in India. In the construction sector, the government now allows up to 100 per cent FDI in only developed plots where the basic trunk infrastructure is already in place.
Commerce and industry minister Nirmala Sitharaman, power minister Piyush Goyal and senior officials with the Department of Industrial Policy and Promotion attended the meeting.
It comes a month after a similar meeting was chaired by Prime Minister Narendra Modi and is in sync with the 2017-18 Budget announcement that the government would consider further easing of FDI rules.
The prospect of permitting 100 per cent FDI in multi-brand retail is also being evaluated although a decision on this is needed to be taken at the highest level of the political establishment, especially since the BJP had earlier opposed the regime. The reason for an apparent rethink on multi-brand retail FDI is the surging demand for jobs and criticism of the government for “jobless growth”.
If this proposal is okayed, global players like Walmart and Carrefour would be able to set up their own outlets here without a local partner. However, sources said as and when 100 per cent FDI is allowed, it would accompany strict conditions that foreign retailers will sell only those items that are produced in India and create massive jobs. Some of the other conditions, such as a minimum investment of $100 million and at least $50 million investment on storage and logistics infrastructure, are applicable even now for multi-brand retail.
The food processing ministry has also been pushing to partially ease rules for retailers to allow them to sell a percentage of non-food items, such as soaps, shampoos and toothpastes, along with food products. At present, up to 100 per cent FDI is permitted in retailing of food products.
The Modi government has already announced two big rounds of relaxations in the FDI regime, first in November 2015 and then in June last year, easing rules in over a dozen sectors ranging from real estate, pharmaceuticals, food marketing, aviation and defence to e-commerce and banking.
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