The government has no proposal to change the existing foreign direct investment (FDI) policy in the multi-brand retail trading sector, a top official said Thursday.
“You know the multi-brand retail policy that exists today. There is no proposal for change,” Secretary, Department of Industrial Policy and Promotion (DIPP), Ramesh Abhishek said here. He was replying to a question whether the government was looking at increasing FDI cap to 100 per cent in the sector, a politically sensitive segment.
Although the current FDI policy permits overseas players to hold 51 per cent stake in an Indian multi-brand retail company, the BJP in its election manifesto had opposed overseas investment in the retail segment. So far, only one foreign player, Tesco, has received approval for opening stores under the multi-brand retail policy. The previous UPA government had cleared the proposal.
The statement assumes significance as industry body CII in its recent report suggested the government to permit 100 per cent FDI in multi-brand retail trade. Confederation of All India Traders (CAIT) has strongly opposed this suggestion.
Abhishek said the USD 650 billion retail sector was growing fast and that it held huge potential for businesses. “Organised retail is only 10 per cent (of this figure) and out of that e-commerce is only 3 per cent. I think there is a tremendous scope for growth in e-commerce and organised retail,” he said.
Abhishek said with growing middle class and increasing incomes, the retail sector was set for a massive revolution. “So there is a plenty of scope to make money and do well,” he said here at CII’s conference on ‘MNCs and India: Creating Mutual Value’.
Further, the secretary asked the industry to provide convincing arguments and detailed analysis while recommending some policy changes. On reducing corporate tax, he said his department too favourdc cut in this tax rate and hoped that a more competitive environment would be made for tax rates.