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Monday, 12 December 2011 |
The government may consider allowing 100 per cent FDI in
single-brand retail stores by introducing some new riders to appease political parties. The Cabinet’s decision of allowing 51 per cent FDI in multi-brand retail has been put on hold till it reaches a political consensus. The FM’s statement in the Lok Sabha has no connection to the FDI in single-brand retail. “The decision to permit 51 per cent FDI in multi-brand retail will be suspended till a consensus is developed through consultations with various stakeholders,” the minister had said after the all party meeting that had been called to break the logjam in Parliament.
On the other hand, the department of industrial policy and promotion (DIPP) is in the process of finalising the press note to give effect to the November 25 cabinet decision to remove the cap of 51 per cent FDI in single-brand retail. If the move gets through, it will let foreign retailers such as Marks & Spencer and Zara completely own their Indian stores, besides facilitating the entry of others like Ikea and GAP that have been taking a wait and watch approach so far.
As of now the existing stringent conditions in the FDI norm approved by the Cabinet include, foreign investors need to own the brand they intend to retail. The brand must be present in other countries and the retailer must source 30 per cent of the products to be retailed from small industry. Now the government plans to add more riders to it.
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