Retail FDI May Be Allowed with Back-End Investment
May 11- Authorities are said to be considering foreign direct investment in multi-brand retail if foreign retailers invest heavily on back-end infrastructure like warehousing and cold storage.
The Department of Industrial Policy and Promotion paper on FDI in retail may include a provision that requires global retailers to put a significant part of their investment in the back-end infrastructure, a source told The Economic Times.
Currently, India restricts foreign investment in the multi-brand retail sector to protect local industries and only allows foreign brands in the wholesale trade and single-brand, luxury retail.
Rising food prices may have influenced authorities to reconsider current retail FDI laws. “We need greater competition and therefore need to take a firm view on opening up of the retail trade,” the Prime Minister said in a statement.
Restrictions on retail FDI have not deterred global retailers from entering the market even partially. American retail giant Wal-Mart has agreed to a wholesale joint venture with the Bharti Group while French retailer Carrefour has plans to open 150 wholesale superstores later this year with an local partner as well.
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