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Government weighing 51 per cent FDI cap in multi-brand retail: report news
21 January 2011

The government is considering a 51 per cent foreign investment cap for opening up multi-brand retail business to overseas investors, reports quoting official sources said today.

Reports quoting government sources said the government may not go for an FDI cap below 51 per cent as it may give rise to arbitrage opportunities.

Efforts are being made by the industry ministry to evolve a consensus on the politically sensitive issue, the reports said.
India currently permits 51 per cent foreign direct investment in the single brand retail. Sources said FDI in multi-brand retail below 51 per cent might not be feasible.

The Department of Industrial Policy and Promotion is studying the report submitted by an expert committee, which has evaluated the stakeholders comments on the issue.
The DIPP had floated discussion papers on opening FDI in multi-brand retail and increasing foreign participation limit in defence production.
US retal giant Wal-Mart and Franc's Carrefour are keen to enter in the segment.

Wal-Mart already has a joint venture with Bharti Enterprises already a joint venture cash-and-carry stores named 'BestPrice Modern Wholesale.'

Meanwhile Planning Commission deputy chairman Montek Singh Ahluwalia has strongly supported opening up of the multi-brand retail sector to foreign investors as, according to him, it would benefit farmers while also helping to contain food price inflation.

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Government weighing 51 per cent FDI cap in multi-brand retail: report