India is not considering allowing foreign direct investment (FDI) in multi-brand retail trading in the current circumstances, the government said on Wednesday.
“At the moment, India can create several Walmarts of its own. We welcome anybody…but if some way this dialogue is moving towards, why not (FDI in) multi-brand retail in India? My answer is, ‘not yet’,” Commerce and Industry Minister Nirmala Sitharaman said at The Economist India Summit 2016 here.
She was replying to the question as why to India is not permitting FDI in retail trade.
Explaining the “thinking behind” this, the minister said there is an issue of last mile connectivity, adequate infrastructure and financial inclusion of those segments such farmers and small traders.
"If only that happens, and if they (farmers and small traders) are adequately empowered to tackle the market themselves. But today we are trying to bridge those gaps. We are still not ready to have them and face a competition where there would not be a level playing field," Sitharaman said.
India currently permits 51 per cent foreign investment in multi-brand retail. The Bharatiya Janata Party, the largest constituent of the ruling NDA, is opposed to FDI in this sector.
To a query on the absence of big supermarkets in India, Sitharaman said that "our supermarkets are friendlier than the faceless supermarkets I have been in the West."
Meanwhile, an e-commerce committee headed by NITI Aayog chief executive Amitabh Kant held its first meeting here on Monday to discuss issues related to the sector, a senior official said.
Currently, the government allows 100 per cent FDI via the automatic route in the marketplace model of e-commerce.
However, foreign investment is not permitted in inventory-based e-commerce.