A policy on foreign direct investment (FDI) in multi-brand retail will take more time, said Union food and consumer affairs minister K V Thomas.
Speaking to the media on the sidelines of a CII conference on food safety issues, he said there were some inter-ministerial differences. “It might take some time for it to get approved,” he added.
Prime Minister Manmohan Singh has also signalled a delay. He told the media yesterday the sector would be opened only after a political consensus, indicating his concern for small traders.
Thomas said the food ministry was formulating the conditions needed for allowing FDI in multi-brand retail. “The concern is not only about the percentage of FDI being approved in India but also to protect the interests of the small trading community and shopkeepers in remote villages," he said.
He referred to recent discussions with certain consumer organisations and traders in Mumbai, to state that certain international companies were stocking food material, which could further trigger a price increase. “This is a big concern for us, " Thomas said.
Walmart India president Raj Jain, also a speaker at the CII conference, said the US retail major would step up its investments significantly once multi-brand retail was opened. Walmart has been waiting for years to enter the promising retail market in India. It is currently in a 50:50 joint venture with the Bharti group for a wholesale business.
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While up to 100 per cent FDI is permitted in the cash and carry (wholesale) segment, 51 per cent foreign investment is allowed in single-brand businesses. FDI is not permitted in multi-brand retail.
The government’s Committee of Secretaries had recently recommended 51 per cent FDI in multi-brand retail, with several conditions.