Commerce Ministry taking legal view on Delhi's U-turn on FDI

The Commerce and Industry Ministry will seek views of the Law Ministry on the Delhi government's move to withdraw implementation of the FDI policy in multi-brand retail sector.

"The DIPP is in the process of taking views of the Law Ministry on the matter.

“It needs an expert and legal opinion as it is a complex issue. States which have agreed to implement the policy cannot easily roll back the decisions," a senior ministry official said.

In a major policy reversal, the AAP government wrote to the Centre to withdraw approval given by previous Congress government for FDI in multi-brand retailing in Delhi, saying the entry of global chains such as Walmart and Tesco in India would result in large-scale job losses.

Commerce and Industry Minister Anand Sharma has termed the Delhi government's decision as ‘irresponsible’ and ‘ill-considered’.

He has also raised the question that whether a minority government with outside support can reverse such decisions.

The central government permitted 51 per cent FDI in multi-brand retailing in September 2012 and left its implementation to the states.

As many as 12 states, mostly Congress-led, including Delhi and Rajasthan, agreed to allow global retailers to open supermarket chains.

Other states include Maharashtra, Karnataka and Andhra Pradesh.

Rajasthan, too, saw a change of government with the Bharatiya Janata Party coming to power after the November-December state assembly elections.

It is still not clear what stand the BJP government in Rajasthan will take on the FDI policy.

FDI in multi-brand retail had not evoked the expected response from global retailers.

So far, only one proposal from UK-based Tesco has been approved by the central government.