Sector-specific FDI in multi-brand retail likely

The department of industrial policy and promotion under commerce and industry minister Kamal Nath had already initiated talks with the department of consumer affairs and planned to table a proposal before the Cabinet in January. When contacted, the minister said he was keen on FDI in such areas since it did not impact neighbourhood stores.

The sources said the Prime Minister, who had no objections, had asked Kamal Nath to table the proposal before the Cabinet. The Left parties may not oppose it since the proposal would not lead to loss of jobs or closure of small shops, they added.

At present, FDI up to 51 per cent is allowed in single-brand retail. This did not have great investment potential since it was limited to premium and luxury brands like Louis Vuitton, Lladro, Fendi, Nike and LVMH. The government also allowed 100 per cent FDI in wholesale cash-and-carry, the model adopted by Metro AG in India.

The minister said he was keen to foster competition in back-end retail activity. Wal-Mart, which has a tie-up with Sunil Mittal8217;s Bharti, Carrefour, which is exploring an alliance with Britannia of Wadias, and Tesco would help the country modernise its logistics infrastructure.