By IANS,
New Delhi : The Rajya Sabha Friday witnessed noisy protests from the opposition over the government decision to allow foreign direct investment (FDI) in multi-brand retail and liberalisation of policy in single-brand retail trade, forcing adjournment of the house for the day.
Commerce Minister Anand Sharma laid down in the house a statement on the government decision amid protest by the opposition, including the Bharatiya Janata Party and the Left parties. The house, which saw an adjournment on the same issue in the morning, was adjourned by the day by Deputy Chairman K. Rahman Khan.
In his statement, Sharma said FDI in multi-brand retail may be permitted to 51 percent with government approval.
Expanding on the new norms for FDI in multi-brand retail, the minister said at least 50 percent of total FDI brought in shall be invested in “back-end infrastructure”, which will include capital expenditure on all activities excluding front-end units.
“For instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, storage, logistics, ware-house, agriculture market produce infrastructure etc. Expenditure on land cost and rentals, if any, will not be counted for purposes of back-end infrastructure.”
“Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products may be unbranded.”
It said that the minimum amount to be brought in as FDI by the foreign investor would be $100 million.
The statement said at least 30 percent of the procurement of manufactured/processed products shall be sourced from “small industries” which have a total investment in plant and machinery not exceeding $1 million.
“This valuation refers to the value at the time of installation, without providing for depreciation. Further, if at any point in time this valuation is exceeded, the industry shall not qualify as a ‘small industry’ for this purpose.”
The statement said the government will have the first right to procurement of agricultural products.
Retail sales locations may be set up only in cities with a population of more than 10 lakh as per 2011 census and may also cover an area of 10 km around the municipal/urban agglomeration limits of such cities.
On FDI in single brand retail trading, the statement said it may be permitted up to 100 percent with government approval.
“Products to be sold should be of ‘single brand’ only. Products should be sold under the same brand internationally i.e. products should be sold under the same brand in one or more countries other than India. ‘Single brand’ product-retailing would cover only products which are branded during manufacturing and the foreign investor should be owner of the brand,” it said.
In respect of proposals involving FDI beyond 51 percent, 30 percent sourcing would mandatorily have to be done from small and medium enterprises/village and cottage industries and craftsmen.
The statement said ‘small industries’ would be defined as industries which have a total investment in plant and machinery not exceeding $1 million.
It said self-certification by companies could be subsequently checked by statutory auditors.