|Foreign Direct Investment in Retail Sector: India|
|November 22, 2004|
|From R to L: Mr. D. K. Mukhopadhyay, Economic Adviser, Department of Consumer Affairs, Govt. of India, Dr. Arvind Virmani, Director & Chief Executive, ICRIER, Mr. L. Mansingh, Secretary, Department of Consumer Affairs, Govt. of India, Dr. Arpita Mukherjee, Senior Fellow, ICRIER and Ms. Nitisha Patel, Research Assistant, ICRIER.
Based on the draft report of the study titled ‘Foreign Direct Investment in Retail Sector: India’ entrusted by the Department of Consumer Affairs, ICRIER organised a seminar to analyse the growth across different segments of retailing, evaluate the likely impact of allowing FDI on stakeholders and suggest the likely timeframe and process of allowing FDI.
The results of the ICRIER study recommend that any opening up of the FDI regime should be gradual (3-5 years) to give the domestic industry enough time to adjust to the changes. Foreign players should not be allowed to trade in certain sensitive products like arms and ammunition and the list of excluded products should be clearly stated in the FDI policy. It suggests that in the initial stage, FDI up to a maximum of 49 percent should be allowed so as to provide an opportunity for the domestic players to enter into joint venture agreements. The study also provides a definition of retail trade. Lastly, the study points out that unilateral liberalisation should precede multilateral liberalisation in sensitive sectors like retailing.
Mr. L. Mansingh, Secretary, Department of Consumer Affairs, Government of India, chaired the session. The seminar was attended by different ministries, organised and unorganised retailers, foreign retailers, industry and trading associations, retail experts, multilateral agencies, real estate developers, manufacturers, academicians and media