FDI in multi-brand retail comes into effect, India Inc euphoric

September 20, 2012

wallmart

New Delhi, September 20: Showing resolve for reforms, the government on Thursday notified its decision to allow global retail giants like Wal-Mart to open stores in India, on a day several political parties called Bharat bandh to protest against the policy.

With this notification, multinational retailers can invest up to 51 per cent to open stores in 10 states and UTs which, till date, have agreed to implement the decision.

"51 per cent FDI in multi-brand retailing, in all products, will be permitted ... " a notification by the department of industrial policy and promotion (DIPP) said. It said the decision will take immediate effect.

The DIPP also operationalised September 14 Cabinet decisions to relax the sourcing norms for foreign retailers investing beyond 51 per cent in single-brand retail and allow 49 per cent FDI by foreign airlies in the domestic carriers.

Besides, the decisions on permitting 49 per cent FDI in power exchanges and increase in foreign equity cap from 49 per cent to 74 per cent in the service providers like DTH in broadcasting sector have also been notified.

In the most controversial area of FDI in multi-brand, the DIPP said the state governments and UTs would be free to take their own decisions.

"Therefore, retail sales outlets may be set up in those States\UTs which have agreed, or agree in future, to allow FDI in MBRT (multi-brand retail trading) under this policy".

Minimum amount to be brought in by the foreign investor would be USD 100 million and outlets may be set up only in cities with a population of more than 10 lakh.

At least 50 per cent of FDI should be invested in 'back-end infrastructure' within three years of the first tranche.

To protest against the government's decision, NDA, Left and SP called Bharat Bandh. The parties were also protesting against the diesel price hike and cap on subsidised LPG.

India Inc euphoric

Hailing the Centre's decision to implement FDI in multi-brand retail, the industry today said this will give a strong message to investors that the government means business and stands firm on its initiatives.

Industry body Assocham complimented the government on its firm decision on economic reforms.

"This will give a strong message to investors inside as well as outside the country that the government means business," Assocham secretary general D S Rawat said.

The politicians must distinguish between politics and economics in the interest of the country. Though not much investments will be flowing from investors immediately but the message it carried is huge, he added.

The government today notified FDI in multi-brand retail operationalizing the Cabinet decision.

The Department of Industrial Policy and Promotion also operationalized September 14 Cabinet decisions to relax the sourcing norms for foreign retailers investing beyond 51 per cent in single-brand retail and allow 49 per cent FDI by foreign airlines in the domestic carriers.

Besides, the decisions on permitting 49 per cent FDI in power exchanges and increase in foreign equity cap from 49 per cent to 74 per cent in the service providers like DTH in broadcasting sector have also been notified.

The development comes on a day when a nation-wide bandh was called by BJP, Left parties and UPA's outside supporter SP to protest diesel price hike and FDI in multi-brand retail evoked mixed response with life and trade being disrupted in some states.

CII said it is important to stay on track on reforms. "The entire decision on multi-brand retail will go a long-way in capital infusion in the country and also leads to strengthening of linkages including benefits to farmers," CII director general Chandrajit Banerjee said.

This is an important reform for India for both growth and development, he added.

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News Network
May 22,2020

New Delhi, May 22: Reserve Bank Governor Shaktikanta Das on Friday extended the moratorium on payment of loans by another three months till August to provide much-needed relief to borrowers whose income has been hit due to the coronavirus crisis.

In March, the central bank had allowed a three-month moratorium on payment of all term loans due between March 1, 2020, and May 31, 2020.

Accordingly, the repayment schedule and all subsequent due dates, as also the tenor for such loans, were shifted across the board by three months.

As a result of this moratorium, individuals’ EMI repayments of loans taken were not deducted from their bank accounts, providing much-needed liquidity.

The EMI payments will restart only once the moratorium time period expires on August 31.

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News Network
May 25,2020

New Delhi, May 25: India witnessed the highest ever spike of 6,977 positive cases in the last 24 hours, taking the total number of COVID-19 to 1,38,845, according to the Union Ministry of Health and Family Welfare.

India is now among the top 10 countries in the world regarding the total number of COVID-19 cases.

With 154 deaths reported in the last 24 hours, the total number of deaths due to COVID-19 now stands at 4,021 in the country.

Out of the total number of cases, 77,103 are active cases and 57,721 have been cured/discharged/migrated.

Maharashtra continues to remain the worst affected state with 50,231 COVID-19 cases, followed by Tamil Nadu (16,277), Gujarat (14,056) and Delhi (13,418).

The fourth phase of the nationwide lockdown imposed as a precautionary measure to contain the spread of COVID-19 is scheduled to end on May 31.

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Agencies
July 21,2020

The Retailers Association of India (RAI) has said that ad hoc lockdowns by state governments are impacting the businesses of already-stressed retailers, along with hurting the economic revival of the country.

In a statement, the body of the organised retail industry said that the long road to recovery for the Indian retail industry continues to meet stumbling blocks with numerous restrictions being imposed at the state and local levels.

"Total lockdowns in some places and limited operational hours and days in several others are creating setbacks for retailers as the already stressed retail businesses are getting further interrupted and in turn, dampening consumer sentiment," it said.

According to RAI, although the intentions are that of citizen safety and social distancing, the recent instances of local lockdowns and ad hoc restrictions being imposed in Uttar Pradesh, Maharashtra, Andhra Pradesh and Karnataka are having a distressing impact on retail businesses.

Retailers are already facing huge setbacks in terms of payment of wages and rentals due to very low sales of about 40 per cent as compared to last year, thanks to the extended lockdown, it said.

Contesting the restrictions on operating hours, Sandeep Kataria, CEO, Bata India said: "Restricted shopping time can lead to unnecessary overcrowding of stores, which is unfavourable towards the personal safety of both store staff and customers. Longer operational hours will support recovery for retailers as well as help adhering to social distancing norms."

Arvind Mediratta, MD and CEO, METRO Cash & Carry India said that these lockdowns will create severe inconvenience for all citizens as they also bar operations of food and grocery retail and wholesale stores.

Such hastily-implemented decisions by states undermine investor confidence and would come in the way of making the country "aatmanirbhar" or self-reliant, he said.

Voicing the concerns of retailers, the RAI has submitted representations to various state and local authorities that puts forth recommendations to get businesses and life of consumers on the track to recovery.

It has said that authorities should mandatorily allow essential shops including kiranas, general trade shops, supermarkets, hypermarkets and wholesalers to operate every day of the week until 9 p.m. to cater to the daily needs of the customers.

It has also sought ensuring uniform and regular opening of all categories of retail for full working hours while following stringent hygiene practices and adhering to social distancing norms. This will help avoid overcrowding outside stores as demand will get distributed over all days of the week, it said.

The industry body has also asked the local authorities to open malls in all states. Malls can ensure a safe shopping experience wherein safety measures are taken by both, the mall authorities and the retailers, it said.

Kumar Rajagopalan, CEO, RAI, said: "The need of the hour is concerted efforts by all stakeholders. While retailers are doing their bit by following stringent hygiene practices, the policymakers too need to support to ensure economic revival across the country. Consumption is important for the country and supports the business environment."

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