News: Indian FDI norms for SSI, retail may be eased
(FE 05/05/2006) New Delhi - The Left may be willing to dilute its stand on the issue of foreign direct investment (FDI) in the retail sector if the government agrees to cap FDI at 20% in the sector and restrict retail joint ventures to metros like Mumbai and Delhi.
Realising that the UPA government might not keep the retail sector out of bounds for global majors for long, the Left is under pressure to review its stand. Sources in the Left said the leadership was now in a rethink mode on the entire issue. Industry and commerce minister Kamal Nath had last week said in Hannover that the government would open the ‘next window’ in the retail sector within 45 days. At present, the government allows 49% FDI in single-branded retail. Gobal retail majors like Wal-Mart, Tesco and Carrefour have been demanding that India should allow them to set shop too.
Sources in the Left said they will, however, seek an assurance from the government that jobs would not be displaced even if retail FDI was allowed only in metros. They also said the FDI limit cannot be 49% as in the case of single-branded retail, but much lower at 20%.
Left leaders pointed out that even Mr Nath had said the entry of global retail players would generate new jobs rather than destroy existing jobs. “We know the government is under a lot of pressure, but in the whole process, it should keep in mind that people do not loose jobs and the liberalisation should be calibrated and well-balanced,” a Left leader said. Left parties are primarily opposed to allowing FDI in retail trade in smaller towns and villages, where families are dependent on a single person’s income, the leader said.
The Left has been arguing that foreign players have vested interest in demanding entry. Insiders, however, say that the Left would mitigate its tirade against the government after the Kerala and West Bengal elections.
Realising that the UPA government might not keep the retail sector out of bounds for global majors for long, the Left is under pressure to review its stand. Sources in the Left said the leadership was now in a rethink mode on the entire issue. Industry and commerce minister Kamal Nath had last week said in Hannover that the government would open the ‘next window’ in the retail sector within 45 days. At present, the government allows 49% FDI in single-branded retail. Gobal retail majors like Wal-Mart, Tesco and Carrefour have been demanding that India should allow them to set shop too.
Sources in the Left said they will, however, seek an assurance from the government that jobs would not be displaced even if retail FDI was allowed only in metros. They also said the FDI limit cannot be 49% as in the case of single-branded retail, but much lower at 20%.
Left leaders pointed out that even Mr Nath had said the entry of global retail players would generate new jobs rather than destroy existing jobs. “We know the government is under a lot of pressure, but in the whole process, it should keep in mind that people do not loose jobs and the liberalisation should be calibrated and well-balanced,” a Left leader said. Left parties are primarily opposed to allowing FDI in retail trade in smaller towns and villages, where families are dependent on a single person’s income, the leader said.
The Left has been arguing that foreign players have vested interest in demanding entry. Insiders, however, say that the Left would mitigate its tirade against the government after the Kerala and West Bengal elections.
posted by InCar Group Press Room at 11:37
0 Comments:
Post a Comment
<< Home