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Commerce Ministry taking legal view on Delhi's U-turn on FDI

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Press Trust of India New Delhi
The Commerce and Industry Ministry will seek views of the Law Ministry on the Delhi government's move to withdraw implementation of the FDI policy in multi-brand retail sector.

"The DIPP is in the process of taking views of the Law Ministry on the matter. It needs an expert and legal opinion as it is a complex issue. States which have agreed to implement the policy cannot easily roll back the decisions," a senior ministry official said.

In a major policy reversal, the AAP government wrote to the Centre to withdraw approval given by previous Congress government for FDI in multi-brand retailing in Delhi, saying the entry of global chains such as Walmart and Tesco in India would result in large-scale job losses.
 

Commerce and Industry Minister Anand Sharma has termed the Delhi government's decision as "irresponsible" and "ill-considered".

He has also raised the question that whether a minority government with outside support can reverse such decisions.

The central government permitted 51 per cent FDI in multi-brand retailing in September 2012 and left its implementation to the states.

As many as 12 states, mostly Congress-led, including Delhi and Rajasthan, agreed to allow global retailers to open supermarket chains. Other states include Maharashtra, Karnataka and Andhra Pradesh.

Rajasthan, too, saw a change of government with the BJP coming to power after the November-December state assembly elections. It is still not clear what stand the BJP government in Rajasthan will take on the FDI policy. FDI in multi-brand retail had not evoked the expected response from global retailers.

So far, only one proposal from UK-based Tesco has been approved by the central government.

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First Published: Jan 15 2014 | 5:57 PM IST

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