FDI in retail: Anand Sharma announces relaxation of norms for single brand

NEW DELHI: In a much awaited reform measure, Commerce Minister, Anand Sharma on Friday announced relaxation of Foreign Direct Investment (FDI) norms in the retail sector. The government announced allowing upto 51% FDI in multi-brand retail and 100% FDI in single brand retail.

Stating that the implementation of the FDI is up to the states, Sharma said that states like Andhra Pradesh, Assam, Haryana, Delhi, Rajasthan, Manipur, Jammu and Kashmir want FDI. "There are states that have reservations about FDI in retail but modern technology is necessary. Remunerative pricing, sourcing is needed," Sharma added.

Calling the government policy on multi-brand retail FDI as enabling, Sharma said that it has an 'Indian signature' to it. Sharma also announced relaxation of sourcing norms for FDI in single brand retail. "For FDI proposals beyond 51% in single brand retail, 30% sourcing from 'Small Industries' has been made mandatory," CCEA said. "The move will attract investment, create employment," Sharma said.

The government had allowed 51% FDI in multi-brand retail in December last year, but the decision was kept in abeyance following widespread opposition from the allies and opposition parties.

Prominent industrialists had been emphasising the need for the government to pus key economic reforms, one of which was allowed FDI in multi brand retail.

Kishore Biyani, Chairman of Future Group welcomed the move. "We are hoping this time the government will stick to its decision (allowing FDI in multi-brand retail) because that is absolutely essential," he said.

"The decision to let individual states decide on whether they want it is a good decision. This should satisfy people who are opposing it. The industry is convinced once a few states implement it the others will see the benefits and definitely consider it as well," he added