NEW DELHI: Multinational retailers such as Walmart, Carrefour, and Tesco may soon be permitted to establish stores in India, subject to stringent investment norms, sourcing conditions, and a cap on the number of outlets in large cities. The Department of Industrial Policy and Promotion (DIPP) is expected to present a proposal seeking cabinet approval for 51 percent Foreign Direct Investment (FDI) in multi-brand retail, contingent upon an investment of at least USD 100 million.
Proposal Details
A draft framework has been prepared with ample safeguards to protect small shopkeepers and to ensure that FDI genuinely contributes to the development of back-end infrastructure. The department has circulated this draft to a committee of secretaries, who will refine it before submitting a final cabinet note. Multinational retailers will be required to file a statement of account with the Reserve Bank of India (RBI) and the Foreign Investment Promotion Board, illustrating their investment in back-end functions.
Addressing States’ Concerns
According to an official, 'The government is very clear that FDI in multi-brand retail should generate large-scale employment and attract quality investment into the country, resulting in the development of back-end infrastructure.' To facilitate easier monitoring, the government will also permit the execution of back-end infrastructure through a dedicated unit. Multi-brand retail stores would be mandated to source at least 30 percent of their products, including food items, from small and medium enterprises, as per the draft framework.