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BW Businessworld

Efforts On For Consensus On Multi-Brand Retail FDI

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The government said on Friday consultations are on with states to arrive at a broad-based consensus on allowing 51 per cent foreign direct investment in the politically-sensitive multi-brand retail trade.

The Finance Minister Pranab Mukherjee in his Union Budget 2012-13 speech said that efforts were on to arrive at a political consensus on the issue of allowing 51 per cent Foreign Direct Investment (FDI) in multi-brand retail.

Finance Minister Pranab Mukherjee, while presenting the Budget for 2012-13, also said a proposal to allow foreign airlines acquire up to 49 per cent equity in air transport undertakings is under active consideration.

Following widespread opposition, including from its own allies and several states, the government suspended its decision to allow 51 per cent FDI in multi-brand retail.

"Efforts are on to arrive at a broad-based consensus with state governments on allowing FDI in multi-brand retail up to 51 per cent," he said.

In November last year, the Cabinet allowed 51 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.

While the decision on FDI in the multi-brand retail sector has been held back, the government has gone ahead with allowing foreign investment in single-brand retail to 100 per cent from the earlier 51 per cent.

The government is again carrying out consultations with stakeholders like farmer associations, consumer associations and food processing industry to reach on a consensus on the issue.