Walmart,Carrefour and Tesco may be pitching hard for allowing foreign direct investment (FDI) in multi-brand retail,but all the government is telling them now is to keep investing in the back-end and have patience.
I have told them that every investment is an act of trust. Believe in India,you wont go wrong, Commerce and Industry Minister Anand Sharma told select media persons in between bilateral meetings with other trade ministers at India Adda.
Retail companies must invest in the back-end first before FDI is allowed in front-end retailing,he added.
At present,the government allows 100 per cent FDI in cash and carry wholesale trading and 51 per cent in single-brand retail. But the government is of the opinion that FDI can be allowed only when the back-end is fully developed and robust.
It is in the back-end where there are enormous opportunities, Sharma said.
According to him,enormous post-harvest losses of 35-40 per cent can be avoided if companies make significant investments in the back-end.
That is where farmers will get remunerative prices and tens of millions jobs created. Let the retail players work with their partners in creating infrastructure for the time being, the minister said.
Sharma,however,said that the government will set benchmarks before multi-brand retail can open shop in the country.
There has to be a benchmark,for instance,minimum threshold of investment in the back-end and job-creation,with half the jobs being created in rural areas, he said.
The government has held far-ranging consultations with various stakeholders after putting in public domain a discussion paper on multi-brand retail. But inter-ministerial consultations are yet to be held.
Policies are not pushed by individual businesses. We are moving forward in the right direction. Our decision will be inclusive,transparent and calibrated, he said.