Govt says no entry curbs on cash & carry
Parliamentary Standing Committee had called for stopping issue of further licences
Sindhu Bhattacharya. New Delhi
The government appears to have ignored a suggestion by a Parliamentary Standing Committee on stopping issue of further 'cash and carry' licences to Indian companies as well as multinational aspirants.
The ministry of commerce (which is the nodal ministry dealing with retail trade policy) has pointed out that there is no restriction on entry of big corporate houses and other domestic investors into wholesale trading, including cash and carry.
The panel had made this suggestion to avoid more "violations" of foreign direct investment (FDI) caps, specifically in cash and carry format where it felt this was being used by multinational companies as route for "backdoor entry" into India's retail trade.
The ministry has also pointed out that the state governments are responsible for checking any violations of the FDI cap of 51% in case of single brand retailing.
As per existing policy, no FDI is allowed in multi-brand retailing, 51% is permitted in single brand retailing and 100% in wholesale 'cash and carry' format.
So does this mean that FDI cap will be eased, at least in select formats?
In its replies to the panel, the ministry has cited the Economic Survey of 2008-09 to reaffirm that certain reforms need to be considered to improve the investment environment and drive growth. "One of the reforms is on FDI in multi-format retail, starting with food retailing and initially this could be subject to setting up a modern logistics system, perhaps jointly with other organised retailers with a condition that it must have (for 5 years say) wholesale outlets where small, unorganised retailers can also purchase items".
On issues such as establishing a national commission for studying problems of the retail sector, a retail regulatory authority and on formulating a model central law for retail trade, the ministry has repeatedly referred to ongoing consultations with state governments. There appears to be no timeline for any of these issues to be taken up.



Tag: RETAIL, FDI, MINISTRY, RETAILING, TRADE, CASH, CARRY, RETAIL TRADE, WHOLESALE, SINGLE BRAND, STOPPING ISSUE, FDI CAP, PARLIAMENTARY STANDING COMMITTEE, PANEL, INVESTMENT, POLICY, POINTED, REFORMS, STATE, FOOD,