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13/05/2013 07:40pm

Multi-brand retailers seek written assurances

image Multi-brand retailers seek written assurances
New Delhi, May 13 (KNN)  Multi-brand retailers such as US based Walmart and French Carrefour have asked the government for assurances in writing about rules regarding compulsory sourcing from SMEs and investing in backend infrastructure.

They seek clarity on those issues in the hope that their proposals would get easy approvals when submitted for clearance, according to media report.

“Some announcements have been made in the Budget by the Finance Minister and some comments were made by the Commerce Minister recently that favour investors.  However, these are not spelt out in the policy.  The foreign retail companies have sought clarification on these and other issues,” said an official from the Department of Industrial Policy and Promotion.

Top among their concerns is whether the SMEs they choose to receive inputs from would cease to be SME’s once they start supplying to them in bulk quantities.  Further, they wonder if they would be permitted to source from SMEs in different states? 

With regard to investment in back-end infrastructure, the foreign investors also wonder if expenditure on buildings would qualify and if existing infrastructure could be used by them.  Clearly the issues have not been clarified in the policy.

Last September, the multi-brand retail segment was open to foreign investors, the government allowing 51 per cent foreign direct investment in the sector.  Proposals are yet to come in. 

In his budget speech, the Finance Minister had also announced that SMEs would continue to receive benefits specified for them for up to three years, even after they graduate out of the category.  (KNN)

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