Newly formed government led by Arvind Kejriwal in Delhi has recently announced its decision to withdraw permission for Foreign Direct Investment in retail. This move has made Delhi the first state to withdraw permission for FDI funded retail stores in the country.
Arvind Kejriwal government has written to the Department of Industrial Policy and Promotion (DIPP) on not allowing FDI funded stores in the state. The DIPP is now examining the letter sent by the Delhi government.
“This will discourage international retailers planning to enter India,” commented J Suresh, chairman of CII National Retail Committee over the Delhi Government’s decision.
The central government had opened multi-brand retail sector to foreign investment more than a year ago which allowed global retail giants like Walmart to open stores in India. However, the final decision to allow these firms to open stores in their respective states was left to the state governments itself.
The decision to withdrew the approval given by the previous congress led government on foreign Direct investment (FDI) in multi-brand retail in Delhi is being termed as anti-investment, “If one party reverses the decision of its rival dispensation upon change of guards, the policy and political risks for global investors would definitely increase in India, scaring them away,” says industrial body Assocham.
Apart from Delhi, states including Maharashtra, Jammu and Kashmir, Haryana, Rajasthan, Uttarakhand, Andhra Pradesh and Assam have in the past agreed to support the entry of foreign supermarket chains.