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Sense of the ministries on FDI in multi-brand retail

Views of different departments of the government on the proposal to allow foreign direct investment in multi-brand retail. A total of 21 departments were consulted during the lengthy inter-ministerial discussions.

Written by ENS Economic Bureau | Published: November 24, 2011 1:53:10 am

Commerce: Should be implemented in only those states that don’t tamper with conditions

Agriculture: Proposed 100 per cent FDI in multi-brand,agreed to 51 per cent; 60 per cent of produce should be sourced from small farmers; 50 per cent of investment in back-end infrastructure; opposed suggestions to reserve 50 per cent jobs to rural youth.

Food Processing: 30 per cent of sourcing from SMEs be imposed on food products; consult industry and states regarding the mechanism for 50 per cent back-end condition and 30 per cent SME sourcing to avoid future glitches

Planning Commission: Inefficiencies should not be sheltered and the adverse impact on domestic retail traders should not be exaggerated; modernisation will wipe out some activities but generate more efficient and remunerative jobs

Consumer Affairs: Supports FDI only till 49 per cent; invest 75 per cent instead of 50 per cent into back-end infrastructure; ensure investment is in the form of fresh capital and not limited to acquisition of Indian investments; encourage MNCs making domestic retail traders as their franchisee; provide credit to indian retailers to strengthen themselves; reserve jobs for rural youth

Department of Telecom: Ready to accept 51 per cent FDI; 50 per cent mandatory back-end investment is not possible in Electronics sector,this could be made to 30 per cent; condition of 30 per cent sourcing from SME may only be a directive; follow procurement policy of Telecom specified as per TRAI recommendations

Small and Medium Enterprises: Should consider staggered FDI entry starting with 18 per cent FDI to begin with; 50 per cent back-end investment,and 40 per cent procurement from MSME; bring a law of Regulation and Conduct for Retailers and; regulatory Authority on Retail Trade Enforcement Organisation

Labour: Employment generation should be at the centre of this

Urban Development: Outlets should be located in commercial Areas as specified in the master plan of respective urban centres

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