Industry & Economy
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Foreign Direct Investment
Commerce Ministry told to review FDI policy in retail
Ambarish Mukherjee
New Delhi
,
Jan. 8
THE first step towards opening up the retail sector to foreign direct investment (FDI) has been initiated.
The Ministry of Finance has asked the Ministry of Commerce & Industry to undertake a review of the present policy of not allowing FDI in the retail sector in a product-specific manner.
The Foreign Investment Promotion Board (FIPB) under the Ministry of Finance has asked the Ministry of Commerce & Industry to review the entire policy of FDI in the retail sector so as to make the policy statement "more focused and product category-specific," Government sources said.
The issue of allowing FDI in the retail sector has been one of the most contentious areas of India's policy on foreign investment in the post-liberalisation era. Over the past several years, the Government has been facing pressure from foreign investors to open up the retail sector for investment while the domestic industry has been fighting tooth and nail to prevent the move.
The Indian retail trade is estimated to be worth $180 billion, of which only a small portion is in the organised sector.
There have been several reports prepared by foreign consultants such as McKinsey and A.T. Kearney as well as major Indian industry organisations such as the Federation of Indian Chambers of Commerce and Industry and the Confederation of Indian Industry on the significance and growth opportunities in the retail sector.
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