NEW DELHI: Multinational retailers namely Walmart , Carrefour and Tesco may soon be allowed to open stores in India subject to inflexible investment norms, sourcing conditions, and cap on number of outlets in large cities. The Department of Industrial Policy and Promotion, or Dipp, is likely to move a proposal seeking cabinet’s consent for 51 percent FDI in multi-brand retail subject to an investment of at least USD 100 mn.
A draft structure has been prepared keeping sufficient safeguards to protect small shopkeepers, and to ensure that FDI actually helps in development of back-end infrastructure. The department has circulated a draft structure to a committee of secretaries, which will fine-tune it before a final cabinet note is moved. Multinational retailers will have to file a statement of account with the RBI and Foreign Investment Promotion Board showing the investment in back-end functions.
Proposals address states’ concerns “The government is very clear that FDI in multi-brand retail should create an employment on big scale and bring quality investment into the country resulting to development of back-end infrastructure,” the official said. For easier monitoring, the government will also allow back-end infrastructure to be executed through a dedicated unit. Multi-brand retail stores would be required to source at least 30 percent of their products, including food items, from small and medium enterprises, according to the draft structure.