India hopeful of consensus on retail FDI

Antwerp: India today said it will soon build a political consensus on allowing FDI in multi- brand retail as the country has a welcoming investment climate. Commerce and Industry Minister Anand Sharma, who is leading a two-day high-level business delegation to Belgium, said the government is in the process of liberalising the foreign investment regime.

According to an official release, Sharma assured foreign investors of the "welcoming investment climate in India and shared the steps taken by the government for liberalising the foreign investment regime" while addressing the Global India Business Meeting. In particular, he impressed upon the foreign investment in retail sector, where the policy for 100 per cent foreign direct investment (FDI) in single-brand retail has already been rolled out.

"Several global majors have already firmed up investment plans (in India)," the release said. He exuded confidence that the government will be able to evolve consensus on allowing foreign investment in multi-brand retail "very soon". The policy decision to allow FDI in multi-brand retail, which would have allowed global retailers like Walmart to open outlets in India, was put on hold by the government in the wake of strong objection from the opposition BJP and UPA`s key allies, including Trinamool Congress.

However, the Industry Ministry has been consulting state governments and other stakeholders like farmers and consumer associations, to arrive at a broad consensus on this issue. In the context of India`s engagement with the European Union, Sharma identified 10 broad areas for economic cooperation, including infrastructure, manufacturing, skill development and pharmaceuticals.

The Indian minister will tomorrow hold substantive discussions with the EU trade Commissioner Karel de Gucht on the progress of India-EU BTIA negotiations. He will also meet the Belgian Crown Prince. The agreement, officially called as the Bilateral Trade and Investment Agreement (BTIA), seeks to sharply reduce tariffs on goods and liberalise services and investments provisions.

Both sides are negotiating a comprehensive free trade agreement since 2007. The talks for the agreement were to conclude in 2011, but differences between the two sides on the level of opening of the market came in the way of the BTIA. Sharma also expressed confidence that after the conclusion of the agreement, it will enhance the bilateral trade and investment "significantly." Currently, EU is the country`s largest trading partner with bilateral trade of USD 110 billion.

Sharma also visited the Antwerp World Diamond Centre (AWDC) and interacted with the leaders of the diamond industry. Antwerp is the hub of global diamond trade and the trade in diamonds constitute nearly 60 per cent of India`s USD 17 billion trade with Belgium. Sharma asked the Antwerp Bourse to establish institutional linkages with Bharat Diamond Bourse (BDB) for building necessary capacities and skill development.

BDB was set up for promoting export of diamonds including diamond jewellery from India and to provide infrastructure facilities. He assured the representatives of the diamond industry that the issues relating to procedural tax simplification would be taken up with the Indian Ministry of Finance. He also shared the recent policy measures for allowing consignment import of rough diamonds.