The government has kic­ked off a public debate by inviting comments and suggestions for

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formulating the rules of allowing FDI in mu­lti-brand retail. The department of industrial policy and promotion (DIPP) floa­ted a paper to elicit feedba­ck from various stakeho­lde­rs on the contentious iss­ue and fixed July 31 as the last date for receiving feedback.

Law permits 51 per cent FDI in single brand retail and 100 per cent-FDI in the wholesale cash and carry tr­ade. FDI is, however, com­pletely banned in multi-bra­nd organised retail. The retail market is $300-350 bi­llion is do­minated by the unorganised sector.

The feedback, published on the DIPP website, seems to be mixed voting both for and against allowing FDI in the sector.

Rajan Bharti Mittal, VC and MD of Bharti Enterpri­ses, is of the view that the government has made foreign investment regime attractive for India to receive significant inflows of FDI. “Domestic players cannot make significant investme­nts in to retail alone,” he sa­ys. FDI in multi-brand reta­iling will help ensure adeq­uate flow of capital and its productive use to promote the cause of modern retail and employment generati­on, Mittal adds.

“FDI in multi-brand retail should be encouraged in small cities and rural ar­eas, as bulk of the consume­rs live in small towns,” according to chairman DCM Shriram Consolidated, DS­CL, Ajay S Shriram said.

MNCs could resort to ‘buying cheap, selling dear’. If the domestic retail mar­ket is affected, many pe­ople will lose jobs, says M Venk­ataraman, tre­asurer, Theva­ram Varthakarkal Sangam.

“We strongly oppose to the FDI in multi- brand retail for numerous reasons. It will increase MNC mark­et share. Once established they will dictate market wi­th cartels between big players resulting in abnormal rates,” according to MP federation of chamber of commerce and industry.

“FDI multi-brand retails are like huge sharks. SME retailers are afraid that the incoming FDI big sharks wi­ll eat up their share of business” Kailash Agarwal, president, Bhopal Chambers of Commerce said.

“Modern retail can offer an good platform to service pr­o­vide­rs for banks to use retail infrastructure as a po­int of consumer contact,” Professor A Amarendra Reddy ASCI institute, Hyderabad said.