India debates foreign retail laws

Fruitnet.com 08 July 2010

The Indian government has opened debate about relaxing its laws on foreign direct investment (FDI) in the retail sector, Business Week has reported.

At the moment, foreign companies are permitted to own 51 per cent of single-brand retail formats, but are prohibited from owning multi-brand outlets such as supermarkets and hypermarkets. Foreign companies are, however, allowed to own 100 per cent of wholesale businesses in India.

India's Department of Industrial Policy and Promotion has prepared a discussion paper on the issue, which aims to look at both sides of the argument.

The laws are in place to protect owners of smaller shops, but major retailers such as Wal-Mart, Carrefour and Tesco claim opening up FDI would help fund investment in farms and the supply chain, as well as reduce prices in the country.

Full article at http://www.fruitnet.com/content.aspx?ttid=15&sid=96&cid=7402

See also "Govt discusses lifting investment in foreign retail" Reuters 7 July 2010 http://in.reuters.com/article/idINIndia-49920120100707