NEW DELHI: India can create several Walmarts of its own, commerce and industry minister Nirmala Sitharaman said on Wednesday, highlighting India’s potential while reiterating that the country is not yet ready to open up multibrand retail to foreign investment.
“We haven’t reached competition where there will be a level playing field if it (multi-brand retail) were to be opened up,” Sitharaman said at ‘India Summit’ organised by the Economist newspaper.
In reply to a question on why India has not permitted foreign direct investment (FDI) in multibrand retail trade, the minister said, “We welcome anybody…but if some way this dialogue is moving towards why not (FDI in) multi-brand retail in India? My answer is, ‘not yet’.”
India allows foreign companies to invest only up to 51% in multi-brand retail while it has removed the cap on single-brand retail. The ruling BJP has been opposed to the idea of opening up the sector because it believes such a move will hurt small, independent stores.
Sitharaman said that India is trying to fix issues of last-mile connectivity, inadequate infrastructure and farmers’ empowerment before it can begin to even consider opening up FDI in multi-brand retail trade.
She said that exporters have not been able to fully exploit the Foreign Trade Agreements and the government is pushing to create more awareness about them. “Review of the FTAs is an ongoing process,” she said.
India plans to share a paper on trade facilitation agreement in services with the World Trade Organisation, the minister said.
“India has not been able to leverage its strength in services through trade facilitation agreement…Many stakeholders have shared their concerns with us. I am glad that PM Narendra Modi has referred to this matter in the G20 summit in China,” Sitharaman said.
India’s service sector contributes more than 55% to the country’s gross domestic product.
The government has appointed a working group to look into the possibilities of expanding trade ties with the UK post ‘Brexit’ referendum.