India Inc pushes for FDI in multi-brand; raises concern on free-trade pacts

New Delhi - Indian industry today asked the government to push for foreign direct investment (FDI) in multi-brand retail trading as well as allowing corporates in agriculture farming. These were among the several suggestions made by industry chambers, including CII and FICCI, during their interaction with Commerce and Industry Minister Nirmala Sitharaman and senior officials here. [caption id=“attachment_2429204” align=“alignleft” width=“380”]  Commerce and industry Minister Nirmamala Sitharaman. Naresh Sharma/Firstpost[/caption] “Members stated that the government should push the FDI in multi-brand retail sector. Suggestions were also made that Indian corporates should be allowed to do agriculture farming,” an official, who attended the meeting, said. India permits 51 per cent FDI in the multi-brand retail sector. The BJP-led NDA government is opposed to allowing FDI in multi-brand retailing, but it has not yet scrapped the policy approved by the previous UPA regime. FICCI said taking into account the sensitivities regarding protecting _kirana_s, the government could consider allowing 100 per cent FDI in multi brand retail in segments such as electronics, apparel and fresh food product retail. Issues including impact of FTAs signed by India, ways to promote start-ups and boost economic growth, were also deliberated upon in the meeting. Sitharaman said the key issues raised by the industry include surge in imports, competitiveness of some sectors and increasing investments, among others. The industry chambers raised concerns over FTAs (free trade agreements) and their impact on Indian industry and commerce, the minister said, adding that the ministry would take inputs from industry at the time of review of these pacts. India has so far signed free trade pacts with countries such as Japan, Singapore, South Korea and Asean. Indian industry and exporters have time and again said that these pacts have benefited the partner countries more. She also asked the industry to delve deep into the causes of lack of competitiveness vis-a-vis imports and take corrective measures to improve that. Sitharaman emphasised on the need for standards across all sectors and sought cooperation to develop that. Besides, the minister sought inputs for negotiations of Regional Comprehensive Economic Partnership and other FTAs. While allaying apprehensions about the 12-nation Trans-Pacific Partnership (TPP) trade deal, he asked the industry for their feedback on export promotion measures taken by the government during the last one year. The chambers suggested measures to further liberalise FDI regime, new initiatives that could be taken up under Make in India programme and strategy to promote start-ups. To promote start-ups, the chambers suggested removing the entire regulatory burden for initial few years and ease of opening and closing the start-up business. Former FICCI President Harsh Pati Singhania said the government should have to look at several issues such as facilitating and closing of start-ups, funding and tax ambiguity for funders. The objective of the meeting was to have an interface with the major stakeholders in industrial development so as to arrive at a common understanding of the problems faced by the Indian economy in manufacturing and also seek suggestions to boost that. It was informed by the officials that FDI in the country has grown by 39 per cent in the last 18 months. Later, an official statement said the industry emphasised on the need for stimulus for increasing the domestic demand through government investments in infrastructure. The chambers demanded for establishment of a grant fund for start-ups to support their capital and innovation expenditure throughout the life cycle. “A concern was expressed about the falling rural incomes and its impact on the domestic demand. The need for change in APMC Act was expressed with a view to increase the farmers’ income,” it said. The role of states in improving the ease of doing business and promoting investment was also highlighted. PTI