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Rediff.com  » Business » Sonia's letter on retail rattles commerce ministry

Sonia's letter on retail rattles commerce ministry

Source: PTI
February 06, 2007 19:47 IST
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The commerce and industry ministry on Tuesday went into a huddle to review the situation following United Progressive Alliance chairperson Sonia Gandhi's letter to Prime Minister Manmohan Singh advising caution on allowing FDI in retail.

"I have not seen the letter. . . I am holding a review meeting," Commerce and Industry Minister Kamal Nath told reporters when asked to comment on Gandhi's letter to the prime minister.

Commerce ministry officials claimed that Gandhi's letter has not reached them yet, for them to comment. However, they admitted the letter could reach them soon.

According to reports, the Congress president wanted the government to first study the impact of transnational super markets on livelihood security of those engaged in small scale operations, before taking further decisions on FDI in retail.

The government has already allowed 100 per cent FDI in cash and carry through automatic route and 51 per cent in single brand. Besides, the franchise route for big operators is available.

It is through these available channels that world's largest retail company Wal-Mart has forged an alliance with the Bharti Group, which has announced plans to roll-out the first store by the end of this year. While the front end stores will be owned by Bharti, they will be co-branded with Wal-Mart.

The entry of Wal-Mart through 'back door' has been opposed by the governent's key ally -- the Left parties. Besides, the Bharatiya Janata Party has also opposed FDI in retail tooth and nail.

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