India Today - - COVER STORY -

ex­ec­u­tive di­rec­tor, tax and reg­u­la­tory ser­vices, EY, “The FDI pol­icy change will def­i­nitely re­duce the time­line for cross-bor­der M&As in the pharma sec­tor which will lead to more funds com­ing into In­dia in this sec­tor.” The Modi govern­ment has set it­self on a col­li­sion course with its ide­o­log­i­cal par­ent with its FDI re­form. The RSS’s eco­nomic think-tank, the Swadeshi Ja­gran Manch, has called the govern­ment’s de­ci­sion to al­low 100 per cent FDI in food pro­cess­ing for trad­ing in e-com­merce a ‘be­trayal’ of farm­ers and traders of the coun­try.

The Modi govern­ment has so far main­tained an uneasy truce be­tween the Sangh and the BJP over al­low­ing FDI in multi-brand re­tail. This is be­cause the RSS and the party count traders among their core sup­port­ers. They will now be di­rectly hit by the lib­er­alised FDI norms. Ex­pect­ing this for a while, this year their fears have come true. Be­gin­ning with Arun Jait­ley’s bud­get this year, the govern­ment has been nudg­ing at FDI in re­tail. The bud­get per­mit­ted 100 per cent FDI in food re­tail. The new pol­icy now per­mits FDI in food pro­cess­ing, much to the RSS’s ire. This is why in­vestors are wait­ing to fig­ure out how far they can go and de­cide on their in­vest­ment pat­terns for sell­ing food prod­ucts man­u­fac­tured and pro­duced in In­dia.

SJM na­tional con­venor Kash­miri Lal told this will move to­wards the cen­tral­i­sa­tion of the food seg­ment and even­tu­ally not al­low di­ver­si­fi­ca­tion of food choices for con­sumers. “This is against the core philosophy of the RSS and their thought lead­ers,” he said.

Fi­nance min­is­ter Jait­ley has tried to pla­cate the RSS lead­er­ship, with­out much suc­cess. The Sangh’s bel­liger­ent stand is mak­ing in­vestors ner­vous. FDI for sell­ing food could be a good first step, they say, it should not be the last. Their worst fear—the RSS might force the govern­ment to al­low state gov­ern­ments to de­cide. Many BJP chief min­is­ters are un­com­fort­able open­ing up this seg­ment. This is why sev­eral ma­jor re­tail­ers are push­ing for an ex­emp­tion from the ‘state govern­ment ap­proval’ clause as one of the pre­con­di­tions to their in­vest­ments. US re­tail gi­ant Walmart, at the fore­front of open­ing up this sec­tor, too, is tread­ing cau­tiously. “We are await­ing the pol­icy doc­u­ment and will study it be­fore mak­ing any com­mit­ment,” Kr­ish Iyer, pres­i­dent and CEO, Walmart In­dia, said. Walmart has so

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