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Tuesday, July 17, 2018

Talking to CMs on FDI in retail: Sharma

Govt is reaching out to build a consensus on opening up multi-brand retail sector.

Written by Agencies | New Delhi | Published: June 2, 2012 11:23:11 am

Commerce and Industry Minister Anand Sharma today said he is reaching out to the State Chief Ministers to build a consensus on opening up multi-brand retail sector for foreign investment.

Following widespread opposition,including from its own allies,the government suspended its decision to allow 51 per cent foreign direct investment (FDI) in multi-brand retail on November 24,2011.

“I have spoken to the government in Punjab…I have written to the chief minister of Bengal. I had another meeting with Mamata Banerjee. She has her reservations which I respect,but at the same time there are states who want it. I did go to Bhubaneswar to talk to Naveen Patnaik. It is their call and we will respect what the states want,” Sharma told CNBC in an interview.

He said the FIPB (Foreign Investment and Promotion Board) approvals can only be there if the state has endorsed a proposal.

According to the Trade License Act,the license has to be given by the state government.

Under the Shop and Establishment Act,the state government accepts to do it.

“It’s unfortunate that this entire issue has been trapped in partisan politics. We should rise above that and come together on issues that serve India’s supreme national interest,” he said.

“If every progressive measure can restore investor confidence,lift the sentiment,it can result in job and wealth creation. But,it is blocked because of partisanship.

It will be doing a disservice to India,” he added.

Despite a setback on the politically-sensitive issue,the government has renewed its efforts to forge a consensus on opening the doors to global retailers in multi-brand retail,estimated to be a about USD 550 billion market.

He said that the ministry officials are talking to farmer organisations.

On the proposal to allow foreign airlines to buy stake in cash-strapped Indian carriers,Sharma said: “This is under consideration. There has been a note which has been received from the civil aviation ministry. The Prime Minister,finance minister,civil aviation minister and I discussed the issue”.

He said that “a decision on this matter will be taken soon”.

The minister said that in a coalition government,“you need to talk to all the partners. I think that process is underway”.

When asked about the expectation on any forward movement on FDI in multi-brand retail and civil aviation before the monsoon session of parliament,he said: “I am not in a position to say whether it will be before or after because we are engaged”.

Further,on single brand retail,Sharma said Scandinavian furniture retailer IKEA had raised its apprehensions on the 30 per cent domestic sourcing norms.

“They did. IKEA chairman had flown to Paris to meet me and our officials when I was there for a visit…I think they are reasonably satisfied with the responses that they have received to their queries. I did’nt see much of a problem.”

On question whether,the government is considering to tweak the sourcing norm,he said: “It’s not a question of tweaking. First of all,some SMEs and Indian business entities will eventually come in. It is for the first year and then it also has to be in value terms.”

He said that IKEA is already sourcing 30 per cent of their requirement from India.

Question is what qualifies to be an SME,” he added.

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