India will be better off without foreign retailers operating multi-brand retail chains across the country as it would harm the vast majority of the country's small and medium traders and farmers, minister of state for commerce and industry Nirmala Sitharaman said today.
According to her, opening up multi-brand retail sector to foreign direct investment could adversely affect labour-intensive sectors of the economy, mainly small and medium enterprises and farmers, she pointed out.
"The sector is probably not best opened up now because the small and medium traders are not equipped to handle it," Sitharaman said while addressing the media after assuming office.
The minister, however, did not say if the new government plans to reverse the current policy allowing 51 per cent FDI in the multi-brand retail business, but merely said she will discuss the issue with officials.
"I will sit with my officials to find out what has happened this while and furthering the manifesto-based agenda," she said.
The BJP manifesto talks about not allowing FDI in multi-brand retail.
Local retailers say they want more clarity on the government's policy on multi-brand retail, which may bar big foreign retailer from entering India.
The BJP manifesto had promised to develop and improve retail infrastructure in the country so as to modernise retail business and improve supply chain.
Major retailers are divided on their views on framing a new retail FDI policy and the segregations and restrictions based on single or multi-brand stores.
Meanwhile renowned economist Arvind Panagariya, who is seen as a front runner for a key advisory post in the Narendra Modi government, wanted the NDA government not to reverse the liberalisation of FDI in multi-brand retail introduced by the UPA.