Government’s attention is drawn to reports in some section of media on various elements of FDI policy in Multi brand retail:

The policy cleared by Union Cabinet on 24th November stipulates that FDI in multi brand retail will be allowed upto 51% foreign equity through the government approval route, subject to adequate safeguards for domestic stakeholders.

The policy rollout will cover only cities with a population of more than 1 million(As per 2011 census, there are only 53 such cities whereas there are 7935 towns and cities in India)

The policy mandates a minimum investment $ 100 million with at least half the amount to be invested in back end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce the post harvest losses and bring remunerative prices to farmers.

Sourcing of a minimum of 30% from Indian micro and small industry having capital investment of not more than $ 1 million has been made mandatory. This will provide the scales to encourage domestic value addition and manufacturing, thereby creating a multiplier effect for employment, technology upgradation and income generation.

India has a federal structure of government . The FDI policy is an enabling framework and it remains the prerogative of the states to adopt it. On ground implementation of policy will clearly be within the parameters of state laws and regulations.

A strong legal framework in the form of Competition Commission is available to deal with any anti competitive practices including predatory pricing.

FDI in multi brand retail allowed as majority ownership via government route, subject to city, investment and local sourcing conditions. The FDI policy allows 51% foreign equity in multi brand retail via the government approval route, limited to cities above one million population, requires a minimum investment with at least half for back end infrastructure, mandates local sourcing from Indian micro and small enterprises, and affirms state prerogative in implementation with competition law safeguards against anti competitive practices.