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Amid stir, India gov't issues retail FDI notification
Publication Date : 21-09-2012
Showing resolve in the face of concerted protests against the new policy allowing 51 per cent foreign direct investment (FDI), the government yesterday notified its decision to allow global retail giants like Walmart to open stores in India.
With this notification, multinational retailers can invest up to 51 per cent to open stores in 10 states and Union Territories which, till date, have agreed to implement the decision.
“Fifty-one per cent FDI in multi-brand retailing, in all products, will be permitted...,” a notification by the Department of Industrial Policy and Promotion (DIPP) said. It said the decision will take immediate effect.
The DIPP also operationalised the 14 September Cabinet decisions to relax the sourcing norms for foreign retailers investing beyond 51 per cent in single-brand retail and allow 49 per cent FDI by foreign airlines in domestic carriers.
Besides, the decisions on permitting 49 per cent FDI in power exchanges and increase in foreign equity cap from 49 per cent to 74 per cent in the service providers like DTH in broadcasting sector have also been notified. In the most controversial area of FDI in multi-brand retail, the DIPP said the state governments and UTs would be free to take their own decisions.
“Therefore, retail sales outlets may be set up in those states/UTs which have agreed, or agree in future, to allow FDI in MBRT (multi-brand retail trading) under this policy,” the notification said.
The minimum amount to be brought in by the foreign investor would be US $100 million and outlets may be set up only in cities with a population of more than 10 lakh. At least 50 per cent of FDI should be invested in “back-end infrastructure” within three years of the first tranche.
Hailing the central government’s (centre) decision to implement FDI in multi-brand retail, industries today said this will give a strong message to investors that the government means business and stands firm on its initiatives. Assocham complimented the government on economic reforms. The Confederation of Indian Industry said it is important to stay on track on reforms.
Mamata slams the centre: Trinamul supremo and West Bengal chief minister Mamata Banerjee tonight hit out at the UPA government for “hurriedly” notifying FDI in multi-brand retail, saying it had no business of doing so after being reduced to a “minority”.
“I have just come to know through media that the centre has notified FDI in multi-brand retail today. Is it ethical, moral and democratic for a minority government to issue government order forcibly and hurriedly when massive protests against it are taking place across the country,” she said on Facebook.