100% FDI in retail will harm shopkeepers, says CPI-M

Government has given its nod to 100 per cent FDI in single-brand retail

In a bid to attract more overseas investment and facilitate job creation, it has also chose to allow foreign airlines to invest up to 49% through the "approval route" in government-owned carrier Air India.

Foreign airlines can now invest up to 49% in national carrier Air India under the Government approval route after receiving a green signal from the Cabinet Committee of Economic Affairs on Wednesday.

"Global brands across different categories, from apparel to electronics to accessories will be aided through this, providing further options to Indian consumers and improving India's ranking in ease of doing business", Wahi said.

"It is a considered decision of the government that we can tweak FDI norms so that some degree of foreign investment is allowed", the official said on condition of anonymity.

However another industry body which represents sizeable number of small retailers, Confederation of All India Traders (CAIT) said "100 per cent FDI in single brand retail through the automatic route will facilitate easy entry of MNCs in the retail trade and also violate the poll promise of the BJP".

Air India had a total debt of about Rs 48,877 crore at the end of March 2017, of which about Rs 17,360 crore was aircraft loan, and Rs 31,517 crore for working capital.

The government has allowed foreign portfolio investors to purchase stakes of up to 49% in power exchanges directly under the automatic routes. However, the big-bang change that the government is unwilling to take on is allowing foreigners into multi-brand retail - that can make players like Walmart, Metro Cash and Carry or Carrefour your local supermarket.

In the financial year 2016-17, total FDI of U.S. $ 60.08 billion has been received, which is an all-time high, read the statement issued by the government.

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At most, it shaves off maybe a month or so from the time it takes for a prospective foreign retailer to get the permissions necessary to set up business in India.

"The government has undertaken another step of relaxing the FDI norms for investment in single brand retail, construction and aviation sector".

The reform announcement is a signal to worldwide investors ahead of Mr Modi's appearance at Davos, "an announcement to say: 'Look, I'm taking steps, I'm not a nationalist, '" said John Samuel Raja, the founder of How India Lives, a New Delhi-based firm that analyses economic and demographic data.

For investments beyond 49%, special regulatory permissions were required from the concerned Govt. departments. This will, in effect, allow 100 per cent FDI under automatic route for SBRT.

India continues to attract high levels of foreign direct investment.

Senior Congress leader Anand Sharma said that 100% FDI in single-brand retail was notified during the previous UPA government and the only change made was to allow it through the automatic route.

The Communist Party of India (Marxist) pointed out that the Bharatiya Janata Party (BJP) has "hypocritically reversed it position" on the issue as it was opposed to FDI in retail trade when in the opposition.

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