Retail FDI likely to get easier norms
Updated: Jul 01, 2013 05:49:39pm
New Delhi, Jul 1 (KNN) In an attempt to woo retailers, the Finance Ministry has come up with a proposal to permit multi-brand retailers to entry sans conditions if they do not hold a majority stake in the Indian venture.
The move has been proposed given the current policy which has had lukewarm response from investors. Investors may have been hesitant about entering a market that had too many regulations with regard to infrastructure and domestic sourcing.
According to reports, the FDI policy and proposal for significant changes will be discussed further at an inter-ministerial meeting today.
Changes proposed may allow Walmart and others to enter without any conditions, if their stake in the multi-brand retail venture is less than 50 per cent.
Experts consider this a major watering down of the retail FDI policy that was announced last September which allows 51 per cent FDI in the multi-brand segment while imposing a mandatory 30 per cent sourcing from small industry and at least 50 per cent investment in back end infrastructure.
By easing retail FDI norms, the government hopes, will help foreign capital flows in to home-grown brands and even specialty retail such as pharmacies, electronics, etc.
In September last year, the government announced the opening of FDI in multi-brand retail, subject to approvals by individual states. This decision was welcomed by economists and the markets, but caused protests and an upheaval in India's central government's political coalition structure.
Thus far, only 11 states and union territories, have agreed to allow foreign investors into the country’s multi-brand space. (KNN)
The move has been proposed given the current policy which has had lukewarm response from investors. Investors may have been hesitant about entering a market that had too many regulations with regard to infrastructure and domestic sourcing.
According to reports, the FDI policy and proposal for significant changes will be discussed further at an inter-ministerial meeting today.
Changes proposed may allow Walmart and others to enter without any conditions, if their stake in the multi-brand retail venture is less than 50 per cent.
Experts consider this a major watering down of the retail FDI policy that was announced last September which allows 51 per cent FDI in the multi-brand segment while imposing a mandatory 30 per cent sourcing from small industry and at least 50 per cent investment in back end infrastructure.
By easing retail FDI norms, the government hopes, will help foreign capital flows in to home-grown brands and even specialty retail such as pharmacies, electronics, etc.
In September last year, the government announced the opening of FDI in multi-brand retail, subject to approvals by individual states. This decision was welcomed by economists and the markets, but caused protests and an upheaval in India's central government's political coalition structure.
Thus far, only 11 states and union territories, have agreed to allow foreign investors into the country’s multi-brand space. (KNN)
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