Defending its policy of liberalising foreign direct investment in retail, the government confirmed that it would go ahead with its plan to expand its ambit, despite objections raised by Congress President Sonia Gandhi in a letter written to the Prime Minister's Office on 11 January.
"The FDI policy is not frozen and we are going ahead with our plans," said a commerce ministry official.
Meanwhile, the commerce ministry has circulated a draft cabinet note to increase FDI up to 51 per cent in specific product categories like consumer electrical and electronic goods, sports goods and accessories.
Last December, Commerce Minister Kamal Nath had discussed with Prime Minister Manmohan Singh the plan to permit FDI in specific product categories. At that time, it was proposed to allow FDI in other categories also -- building equipment, stationery and possibly even furniture.
Agency reports said the department of industrial policy and promotion had sent a clarification on Gandhi's letter.
Gandhi had said that the government should study the impact of transnational super markets on the livelihood security of small scale operators before taking further decisions on FDI in retail.
The reports also said the commerce ministry had informed the PMO that the Bharti Group had said its joint venture with Wal-Mart was in compliance with FDI policy.
Commerce and Industry Minister Kamal Nath had also said that a clarification on the Gandhi letter had been sent. "The PMO had asked for details on the FDI policy on retail and we have sent our comments, so what is the fuss about?" he said.
