FDI In Retail: Government Treads With Caution
The Union Government issued its much awaited clarification with regard to FDI policy in multi brand retail trading (“MBRTâ€).
June 12, 2013 / 18:28 IST
The Union Government issued its much awaited clarification with regard to FDI policy in multi brand retail trading (“MBRT”).
In September 2012, the Government had allowed FDI in MBRT up to 51%, braving significant political opposition and legal hurdles. The liberalization came with several riders, notably the discretion vested with individual state governments to decide whether foreign owned multi brand retail stores would be allowed or not in their states as well as mandatory capital commitment obligations, investments in back-end infrastructure and sourcing of products. Despite the government’s concerted efforts to push retail reforms, no formal application has been filed till date under this MBRT policy.Various clarifications had been sought by large multi brand retailers interested in investing in India with regard to policy interpretation and implementation on key issues arising under the current policy. The Government, while clarifying these questions, has followed a conservative approach and reiterated strict adherence to its September policy pronouncements. 
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