Committee of Secretaries recommends 51% FDI in Retail

Committee of Secretaries(CoS) today recommended allowing 51% FDI in the multi-brand retail, with a rider that the foreign investment should be at least USD 100 million. "The Committee of Secretaries (CoS), which met under the Cabinet Secretary Ajit Kumar Seth, also decided that the overseas mega retail chains will have to pump in at least half of their investment in the back-end supply chain," a source said. The politically sensitive issue will soon be taken to the Cabinet, the source added. Several global retailers like Wal-Mart are waiting in the wings for a full-scale entry into India''s multi-brand retail segment.
The final clearance by the secretaries will have to be endorsed by the UPA leadership, which is likely to weigh the pros and cons of the move, especially ahead of the Uttar Pradesh Assembly elections scheduled next year. Last year, the Department of Industrial Policy and Promotion (DIPP) had initiated a debate on allowing FDI in the multi-brand retail sector, which is dominated by mom-and-pop stores. At present, India allows FDI only in single brand retail chains like Nike and Louis Vuitton, with a cap of 51 per cent.
Winner: If cabinet approve the 50% FDI in Multiple retail definitely Big Corporate house, Foreign retail players will be winners and Middle class people will gets jobs in these stores.
Looser: Small size stores and general store owners in small and medium size cities, who will face the heat and indirectly people working in these shops will loose jobs, some economics also think that there are chances that they can control the price in India as big stores like Wal mart can buy 50% of production of any crop and can control the price.