Monday, May 18, 2009

Will UPA government open up FDI? | ET

With the Left off its back, the devil will no longer be in the retail. A new UPA government may open the gates for foreign

direct investments (FDI) in the retail sector in its second term, a boon for the cash-strapped sector desperately looking for fresh funding and partnerships with foreign retailers.

Prime Minister Manmohan Singh, who is keen on opening up the sector, may make an announcement in the first few months of his new tenure and has been reported by the foreign media as indicating this.

"The signal (from the government) on FDI is clear. It (the policy) will bring in much-needed competency and encourage big developments in various retail segments," says Kishore Biyani, CEO of India's largest retailer Future group that runs Big Bazaar, Pantaloon, Hometown superstores.

Despite opposition from the Left, the government had in 2006 allowed 51% FDI in single-brand retail. Now, it is almost ready with its policy on allowing 100% FDI in single-brand and partial FDI in multi-brand retail, according to government officials familiar with the development.

Intense lobbying by the industry, including some big names in the domestic retail sector, made the UPA government, in the last year of its term, change the norms for computing foreign investment.

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