The government today indicated an “early” decision on opening multi-brand retail to foreign investment, stating that the issue is receiving attention “at the highest level”.
“We will take the early and correct view...When I say early view, it means early view,” Commerce and Industry Minister Anand Sharma said, when asked whether the much-delayed decision could be expected this year.
At present, India allows 51 per cent FDI in single-brand retail and 100 per cent in cash and carry format of the business. Several global chains like Wal-Mart, Metro and Carrefour have opened their cash and carry stores and are waiting in the wings for opening of the policy for front-end retail.
A group of secretaries headed by Cabinet Secretary Ajit Kumar Seth had in July recommended 51 per cent FDI in the politically sensitive sector. The committee also recommended that at least 50 per cent of the investment and jobs should go to rural areas and the minimum investments should be $100 million.
In July 2010, the Department of Industrial Policy and Promotion (DIPP) floated a discussion paper on opening of the multi-brand retail.
Global retail giants are eying India's retail sector, dominated by mom and pop stores. Only four per cent of India's retail is in the organised sector.
India, which is the second largest producer of food grains and vegetables and fruits, suffers huge post-harvest losses of up to 35-40 per cent due to lack of adequate infrastructure, like cold storage facilities and processing.