FDI in retail: All-party meeting fails, Oppn firm on rollback

The all-party meet chaired by Finance Minister Pranab Mukherjee to discuss the deadlock in Parliament has been unable to find a solution with the Opposition relentless in its demand that the government roll back its decision to introduce 51 per cent foreign direct investment in multi-brand retail.

The government bought some time with Leader of the House in Lok Sabha and Finance Minister Pranab Mukherjee telling the meeting that he would take the views of the Opposition to the Prime Minister and the Cabinet since the FDI decision was taken by the Cabinet.

“The Opposition parties agreed with this suggestion,” CPI(M) leader Sitaram Yechury said after the meeting. It now remains to be seen what internal permutations the Cabinet arrives at to find a mutually acceptable formula on the FDI issue.

After the meeting, Mukherjee said he would also talk to UPA Chairperson Sonia Gandhi to decide how best to resolve the impasse in Parliament.

Mukherjee said Opposition leaders have suggested a rollback of the decision and a discussion in Parliament on the issue under an adjournment motion.

“I informed them (Opposition leaders) that I will talk to the leadership -- Prime Minister and Sonia Gandhi. You will come to know the government's decision,” he told reporters here.

Referring to his meeting with them earlier in the day, Mukherjee said, “They have given various suggestions. One of their suggestion is you roll back... another suggestion has come that this should be discussed under an adjournment motion.”

Meanwhile, Parliament was on the boil for the sixth consecutive working day on Tuesday with the Opposition determined to scuttle all business till a decision was reached on FDI. After an initial adjournment till noon, both Houses were later called off for the day.

FDI to increase competition in organised retail: Citi

NEW DELHI: Notwithstanding strong opposition to foreign direct investment in multi-brand retail, a Citi report today said the entry of global retailers like Walmart will increase competition in India's organised retail sector. 

In addition, USD 15-20 billion in FDI could flow into the country over the next 10 years as a result of the government's decision to allow foreign direct investment (FDI) in multi-brand retail, the report by the global financial services major said. 

"The move... will help improve competition in the organised sector through the entry of several players such as Carrefour and Tesco, which have been waiting on the sidelines, and enhance expertise in logistics, supply chain management from multinationals," Citi said in its 'India Microscope' report. 

The report also said the move would help enhance the share of organised players in the overall retail sector, who currently account for about 6 per cent of India's USD 470 billion retail market. 

Parliament has been paralysed for the last three days as the entire Opposition, joined by UPA allies TrinamoolCongress and DMK, is protesting against the Cabinet decision of November 24 to allow 51 per cent foreign direct investment in multi-brand retail. 

Multi-brand retail in India is largely in the unorganised sector dominated by neighbourhood kirana stores and there is a concern among political parties and traders that these stores would be impacted by the entry of global retailers. 

Citi's report also asserted that increasing the FDI cap in insurance has the potential to attract about USD 9-10 billion in FDI in the country over the next decade.