Economy

Curbs on FDI in single-brand retail to be eased, those on multi-brand will continue, says Goyal

Our Bureau New Delhi | Updated on July 16, 2019 Published on July 16, 2019

Commerce and Industry Minister Piyush Goyal   -  THE HINDU

Foreign investors must ‘respect’ Indian sensitivities: Commerce Minister

Commerce and Industry Minister Piyush Goyal has indicated to foreign investors that there will be easing of rules for single-brand retail soon but the restrictions on multi-brand retail would continue.

Addressing the CEOs of multi-national companies, at a meeting of the India-UK Joint Economic and Trade Committee in London, Goyal said India had opened up opportunities for single brand retail and will ease some “detrimental clauses’’ of the policy in the next few weeks which will help foreign investors, said an official release.

Earlier, Goyal had said in an interaction with BusinessLine that the government was looking at allowing foreign investors in single brand retail to meet their 30 per cent mandatory local sourcing requirement by also exporting the products they manufacture, apart from selling it in their stores in the country.

The Department of Policy for Investment and Internal Trade (DPIIT), the nodal department for FDI policy making, is also examining a proposal for allowing the sourcing requirement to be met in a bunch of eight years, instead of five.

The easing of rules in single brand retail could help companies like phone manufacturer Apple which has been seeking dilution in sourcing norms.

The Minister, however, asked foreign companies to “respect Indian sensitivities’’ on restrictions of foreign investment in multi-brand retail. “Particularly e-commerce companies coming to India will have to ensure that they stay within the letter and spirit of the law when it comes to multi-brand retail and India’s policies around that,” a government statement quoted the Minister as saying.

Foreign retailers including Walmart and Amazon have been unhappy with the government’s decision to bring about a tightening of FDI rules in e-commerce which, they say, have affected their operations in the country.

In December 2018, the government issued a notification specifically stating that FDI-funded e-commerce entities that operate as a ‘marketplace’ shall not be allowed to sell products from companies in which they have any ownership or equity interest. It also stated that a single vendor can’t account for more than 25 per cent of sales in an e-commerce marketplace platform.

India–UK trade and economic relations are reviewed annually by the JETCO, which was set up in 2005, at the level of Commerce and Industry Minister.

On the side lines of the event, India and the UK agreed to set up three new bilateral working groups to tackle barriers in specific sectors including food and drink, healthcare and data services.

 

Published on July 16, 2019
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