Cabinet clears 51% FDI in multi-brand retail

New Delhi, November 24, 2011

After dithering for a long time, the Union Cabinet today cleared a proposal to allow 51 per cent Foreign Direct Investment (FDI) in multi-brand retail and raised the cap to 100 per cent in single brand retail.    
This will allow global retail giants like Wal Mart, Tesco and Carrefour to enter the Indian market. 
At present India allows 51 per cent FDI in single brand retail and 100 per cent FDI in cash and carry format of the business. FDI is not allowed in multi-brand retail. 
Most ministries, including those of finance and textiles as well as the Planning Commission were in favour of the Industry ministry's proposal to open the sensitive sector to foreign players.
A decision on the politically sensitive issue has been pending for more than two years as opposition parties are against foreign investment in this sector. The main Opposition party, the BJP, as well as some allies of the UPA are also against the sector being opened to foreign investment.    
The $ 600 billion segment is dominated by small "kirana" shops. 
The Opposition has expressed concerns that allowing major global retailers would lead to unemployment among the unorganised sector.

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