Make in India, sell in India: Government to free up FDI in multibrand retail?
In a bold reform move, the government is considering a major overhaul of the foreign direct investment policy that could end up freeing the sensitive multi-brand retail segment. Sources tell ET now FDI could be freed up for multi brand retail if the foreign retailers sell goods with the Made In India label.
Sources say the government is looking at adopting an innovative manner in liberalising the politically sensitive sector to 100% FDI, and that is by following a policy of "Make In India, Sell in India".
Interestingly, opening up the retail sector will be a result of allowing foreign retailers to sell multi branded goods produced in India. It will not be liberalised explicitly as under the "retail sector" in the FDI policy.
Sources say the DIPP last week on February 22 discussed liberalising the retail sector with lawyers and consultants.
"India is wooing investors worldwide to Make In India. But current regulations do not permit them to fully own the stores to sell in India. That is a major anomaly in the Make In India initiative," said a person who attended that meeting on the condition of anonymity.
Such a move is expected to give up a major leg up to manufacturing, and help immensely in job growth according to a government official, who went to say the guidelines will not permit 100% FDI in front end retail for selling cheap imports. This rationale may also be used to counter any possible political backlashes, and also with trade unions.
This government has already exercised such a model in the foods category. Last year it allowed 100% FDI in food trading provided all of the goods were produced domestically.
Sources say the government is looking at adopting an innovative manner in liberalising the politically sensitive sector to 100% FDI, and that is by following a policy of "Make In India, Sell in India".
Interestingly, opening up the retail sector will be a result of allowing foreign retailers to sell multi branded goods produced in India. It will not be liberalised explicitly as under the "retail sector" in the FDI policy.
Sources say the DIPP last week on February 22 discussed liberalising the retail sector with lawyers and consultants.
"India is wooing investors worldwide to Make In India. But current regulations do not permit them to fully own the stores to sell in India. That is a major anomaly in the Make In India initiative," said a person who attended that meeting on the condition of anonymity.
Such a move is expected to give up a major leg up to manufacturing, and help immensely in job growth according to a government official, who went to say the guidelines will not permit 100% FDI in front end retail for selling cheap imports. This rationale may also be used to counter any possible political backlashes, and also with trade unions.
This government has already exercised such a model in the foods category. Last year it allowed 100% FDI in food trading provided all of the goods were produced domestically.
