India Inc today, demanded that the government further ease Foreign Direct Investment norms in sectors such as multi-brand retail, education and e-commerce. The government’s position in this regard has been conflicting so far. The country’s leading industry associations also sought for more liberalised norms for the insurance industry.
These were among the various suggestions made by the industry chambers which includes CII and FICCI, during their meeting with Nirmala Sitharaman, Commerce and Industry Minister and other senior officials.
“Members stated that the government should push the FDI in multi-brand retail sector. Suggestions were also made that Indian corporates should be allowed to do agriculture farming,” an official, who attended the meeting told The First Post.
In the Pre-Budget meeting, India Inc. also raised concerns that Free Trade Agreements have an adverse impact on local manufacturing and they demanded support to boost manufacturing, exports and startups. FTAs, according to them have led to import surges as a consequence of lower/nil duties. FICCI also looked for clarity on FDI norms in e-commerce by pointing out that though 51 per cent FDI is permitted in multi-brand retail, FDI is prohibited in business-to-consumer (B2C or retail) e-commerce. It added that FDI should be allowed in B2C e-commerce in a phased manner and there could be a requirement to source significantly from within India to promote ‘Make in India’ and focus on preferable sourcing of certain percentage from SMEs and MSMEs.
“We heard the industry’s perspectives on what the Centre and the state governments can do to boost investment, manufacturing, exports and startups,” Commerce and Industry Minister Nirmal Sitharaman told reporters after the meeting. “They raised concerns on FTAs. We will look into the surge in imports and take measures to raise the competitiveness of the local industry,” she said.
On greater liberalisation of FDI in retail, FICCI said: “Taking into account the sensitivities regarding ‘protecting kiranas’, the government could consider allowing 100 per cent FDI in multi-brand retail in non-food segment such as electronics and apparel. In food space, there is scope to allow 100 per cent FDI in fresh food product retail,” as reported by The Hindu.
Till now, the NDA government has not done away with the previous UPA –approved policy on FDI in retail. The earlier policy allowed 51 per cent FDI in multi-brand and 100 per cent in single brand. However, till now, the government has far discouraged any investment in multi-brand retail to protect the interests of traders, who represent a major vote bank for the BJP.
