Most clarifications sought by foreign investors including British grocery major Tesco and US multi-brand retailer Walmart on India’s new foreign direct investment policy in retail are not complex and can easily be sorted out, Commerce and Industry Minister Anand Sharma has said.

“When a policy is made, naturally investors would like greater clarity. Most issues on which clarity is sought are not complex,” Sharma said in response to a question on the apprehensions Tesco and Walmart had put forth in their recent meetings with the Minister in Davos.

India recently changed its FDI rules for the retail sector allowing 50 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.

This is subject to the condition of mandatory sourcing of 30 per cent of inputs from within the country.

“The retailers want to know if they open up stores in one State will their domestic sourcing activities be restricted to that State or can they source from the region, “ Sharma said talking to reporters at the CII Partnership Summit in Agra.

The answer to this is very simple and easy to explain, the Minister said.

He said it was clear in the policy that sourcing, including from the small and medium enterprises, will be from the entire country.

Agro sourcing, too, will be from the entire country. It is, therefore, a decision that the retailer would take depending upon logistics, Sharma added.

Tesco, that mainly sells groceries including processed food, set up an Indian subsidiary to buy fresh and processed foods from the country for its global stores last year. It now wants to set up retail outlets in the country.

Walmart tied up with Bharti in 2007 for a joint venture in wholesale cash-and-carry.

In his meeting with Sharma in Davos earlier this month, Walmart CEO Doug McMillon said that his company was ‘excited about India’ and they are studying the conditions before making the final announcement.

amiti.sen@thehindu.co.in

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