Indianmandarins has learnt that the DIPP is seriously evaluating a proposal to remove the unofficial ban on FDI in multi-brand retail because it violates the principle of make in India campaign. It is pointed out that those who would invest in India’s manufacturing would also like to sell their products through these chains and other retail outlets.
The current FDI policy already has a provision for allowing 51 per cent FDI in the multi-brand sector as the BJP did not roll back the policy decision taken by the previous UPA government.
The Food Processing Ministry recently wrote to the Prime Minister’s Office making a case for allowing FDI in the sector as many international companies that have got into the sector are unable to market their products efficiently in the absence of multi-brand retail chains.
While the central government is trying to get all states on board, the involvement of all states is not mandatory for clearning the policy framework for FDI in multi-brand retail. BJP-ruled States as well as Tamil Nadu and Karnataka have expressed interest in allowing foreign investment in multi-brand retail. These states can go ahead once the unofficial ban is lifted.
For the states not wanting FDI in multi-brand retail, they could happily not implement the policy and lose revenue.
Written by: Rakesh Ranjan (Editor-in-chief)