Top Story


Home >> Marketing >> Article

Govt shuts door on FDI in retail

Font Size   16
Govt shuts door on FDI in retail

To be used as a bargaining chip at WTO talks.

The government has decided to put foreign direct investment in the retail sector on the back burner, refusing to submit to pressures from multinational giants, including a direct plea from Walmart CEO John Menzer, who was in India recently.

Instead, the government has chosen to go along with the Left parties which have been opposed to it all along. Also, a section of the government is of the view that a decision to open up the retail sector to FDI should not be taken before the World Trade Organisation’s Hong Kong ministerial in December this year as it is an important bargaining chip in service sector negotiations.

“There is no proposal to open up the sector in the immediate future,” officials told Business Standard, adding that the Commerce and Industry Ministry, which dealt with FDI policy, would hold more discussions before finalising.

“The European Union and US see a huge opportunity in the retail sector in India. We can use this as a bargaining chip at the WTO instead of opening it up beforehand,” said an official.

Top retail chains like Walmart, Carrefour and Tesco had met officials to push for FDI in retailing. Walmart’s Menzer, on his visit to India, had even called on Prime Minister Manmohan Singh in this respect.

In its draft Cabinet proposal on the revised service offers to the WTO, the commerce ministry had mooted 100 per cent FDI in retail. This was later dropped following fissures within the Cabinet.

The government also turned down the request of Singapore to open up the retail sector during the recently concluded negotiations on a Comprehensive economic cooperation agreement, which is to be signed on Wednesday.

In an internal note on the retail sector in India circulated among ministries earlier this year, the department of industrial policy and promotion had made a case for allowing FDI in retail, saying any move in this direction would ensure that the domestic players were not unduly displaced and sufficient opportunities were available for the growth of the domestic players.


The Left parties have decided to boycott all future Left-UPA meetings over the government’s stand on divestment. CPI(M) General Secretary Prakash Karat said despite continuous opposition from the Left, the UPA government had been persistent in its policy of disinvestment even while retaining 51 per cent equity.

In a letter to UPA Chairperson Sonia Gandhi, signed by all the Left parties, the point is made forcefully.

“There is no scope for misunderstanding here. Navaratnas like BHEL can go to the market for raising capital for their own needs. It is not for the government to sell their shares and appropriate those proceeds.”


Kranti Gada joined the family business at Shemaroo in 2006 after a successful stint of over two years in marketing at Pepsi Co. She has been associated with the company for 12 years.

Exchange4media interacted with Jaspreet Chandok, Vice President and Head (Fashion) , IMG Reliance Pvt. Ltd on seamless brands integrations planned for Lakme Fashion Week, walking tall despite blazing trails like GST, demonetization and being a part of the larger cultural space

Their strategy to educate the consumers to make well informed decisions at all stages has worked out well.

Bobby Pawar, MD, CCO - South Asia, Publicis India, talks about his idea of chilling out

Understanding the round-the-clock nature of change, KG Suresh, Director General, Indian Institute of Mass Communication, in a conversation with exchange4media, talked about his plans to introduce a fu...

The mall has a diverse range of media formats that includes, billboards, backlit kiosk, pillar wraps, product/promotion display spaces etc.

The beauty of the internet business is that as your cost curve flattens, your revenue curve keeps growing up and that's why the valuations are so high, said Ashish Hemrajani, Founder-CEO, BookMyShow