To raise FDI caps in several sectors, the Department of Industrial Policy and Promotion (DIPP) has called a meeting on Monday and Tuesday with secretaries of 17 ministries including defence , petroleum, home, telecom and finance suggested by the committee headed economic affairs secretary Arvind Mayaram.
DIPP Secretary Saurabh Chandra will head the meeting and prepare a report based on the recommendations the feedback and discuss with the Finance Minister and Commerce and Industry Minister Anand Sharma,” senior official in DIPP told The Pioneer.The report would subsequently be placed for discussion in the inter-ministerial meeting called by Prime Minister Manmohan Singh on July 5 to discuss the issue of revision in FDI caps.
The Mayaram Committee has recommended raising FDI limit in almost all sectors to 49 per cent through the automatic route.It suggested raising FDI cap in multi-brand retail trading to 74 per cent under the Government approval route from the current 51 per cent and to 49 per cent from 26 per cent for the defence sector.
It also proposed raising the cap to 49 per cent under automatic route in sectors such as single-brand retail, existing pharmaceutical companies, power and commodity exchanges, PSU banks, tea plantation, print media, PSU petroleum refinery, asset reconstruction companies, stock exchanges, insurance, depositories and clearing corporations and satellite services.
In the civil aviation sector, the committee suggested 100 per cent FDI in non-scheduled air transport services under the automatic route as against the current 49 per cent.“There is no definition of single-brand retail in the FDI policy. DIPP is working on clearly defining the term, the department will be able to remove the dilemma over selling of sub-brands or labels under the ambit of FDI policy in the single brand retailing,” official said when asked about defining single brand retail.
As per the current policy, products to be sold should be of a ‘single brand’ only.According to industry experts, this policy means multiple brands or sub-brands owned by the same company can neither be sold under one roof nor sold by the same firm.
“There is no mention of sub-brands and labels in the Indian FDI policy. Globally also, there is no such concept of single-brand retailing,” they added.The M&S sells sub-brands like limited Collection, Autograph, Collezione and Blue Harbour apart from its flagship M&S brand, in its stores across the country.
Similarly, Spanish clothing company Inditex sells the Zara brand in partnership with Tata Group’s Trent in India. However, Zara’s products are branded as Zara Man and Zara Woman.Inditex-owned Massimo Dutti also has different brands of products for men and women, although both brands include the mother-brand’s name in the prefix.