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The Cabinet won’t consider any proposal to allow foreign direct investment (FDI) in multi-brand retail at its meeting on Friday, said trade minister Anand Sharma, responding to speculation that the government was likely to approve such a move.
Sharma also denied that he would be meeting Vayalar Ravi, ministry of micro, small and medium enterprises, to evolve a consensus on the 30% local-sourcing clause for single-brand foreign retailers.
Press Trust of India had reported on Wednesday that Ravi had written to Prime Minister Manmohan Singh seeking the retention of the local-sourcing norm.
“There is no dispute. The local-sourcing clause has to be there; it is important for job creation,” Anand said.
PTI cited Ravi as saying that “If there is any relaxation in this norm, itself, it would lead to a major upsurge in cheap imported goods, which are being made in non-transparent economies where direct and indirect subsidy regimes, coupled with currency controls, ensure unfair exports to third countries.”
Meanwhile, PTI also reported that the Planning Commission will strongly support allowing foreign direct investment in multi-brand retail in the 12th Plan period (2012-17). The 12th Plan document, which will be placed before the full Planning Commission meeting on Saturday, has argued that early steps to liberalise FDI in retail will send the right signals to investors, PTI said, citing unidentified people.
India should build on the success of previous liberalisation in FDI in other sectors, such as insurance, and before that telcom, PTI cited them as saying.