No decision yet on multi-brand retail FDI: Pranab Mukherjee

NEW DELHI: The government has not taken a decision yet on opening up multi-brand retail to foreign investors, finance minister Pranab Mukherjee told the Lok Sabha on Friday.

"The government has not taken any decision in this regard," Mukherjee said in response to a calling attention notice.

Terming the issue complex, the finance minister said states would have to be involved in building a larger consensus before arriving at a decision.

Mukherjee also cited a report prepared by the United Nations Conference on Trade and Development (UNCTAD), which says that job losses in the informal sector far outweigh the benefits of allowing FDI in multi-brand retail. The current rules permit only 51% foreign direct investment in single-brand outlets and 100% in wholesale trade. No FDI is allowed in multi-brand retail.

Mukherjee's statement means companies, such as Wal-Mart Stores Inc and Carrefour SA that have been pushing the government to liberalise India's retail industry, would have to wait longer. The two have wholesale ventures in India.

Earlier, the commerce and industry ministry had invited suggestions from stakeholders on whether FDI should be allowed in the sector. The majority of respondents had opposed the idea.

An inter-ministerial panel, set up to look into the responses, said 73 out of 109 responses received opposed any FDI in multi-brand retail. The panel did not make any recommendations on the issue. Organised retail has only 6% share of India's retail segment.but political opposition to foreign entry in the sector has been strong.