Govt clears 100% FDI in single-brand retail
The government has cleared a proposal allowing 100 per cent foreign direct investment (FDI) in single-brand retail via automatic route. It has also eased FDI rules for the aviation and the construction sectors.
The government said the move was to liberalise and simplify the FDI policy to provide ease of doing business in the country. It claims that the decision will lead to larger FDI inflows contributing to growth of investment, income and employment.
The existing policy FDI policy on single brand retail trading allows 49 per cent FDI under automatic route, and FDI beyond 49 per cent and up to 100 per cent through government approval route.
The move has received mixed opinions. The Confederation of All India Traders (CAIT) objected to the government’s move to allow 100 per cent FDI in single-brand retail, saying the decision would lead to an easy entry for multi-national companies and harm domestic trade.
Meanwhile, the industry experts, as well as the largest trade body of retailers Retailers Association of India (RAI), have hailed the new foreign investment norms for single-brand retail. “We believe the decision to allow 100 per cent FDI through automatic route will ease the process for foreign as well domestic brands,” Kumar Rajagopalan of RAI was quoted.