ECONOMICS CIA -3

In a landmark liberalizing policy in the sensitive multi-brand retail sector,

India allowed 100% foreign investment in processed food retailing
provided they are manufactured in India that will help retailers such as
Marks & Spencer, Tesco, Walmart and IKEA to set up food-only retail
outlets.

Badal had written to the Prime Minister's Office pushing for 100% FDI in
multi brand retail in the food processing sector saying such move would
create of infrastructure, revenue and uplift the farmers.

In 2013, India allowed 51% FDI in multi-brand retailing but such

ventures come with a host of riders such as 30% mandatory local
sourcing, $100 million upfront investment and half of it in backend
infrastructure. With the new ruling in the budget, retailers can sell their
own food products without any restriction as long as they are produced
within the country, government officials said.

In 2012, while approving IKEA's Rs 10,500-crore investment proposal,

the Foreign Investment Promotional Board (FIPB), the agency that clears
all foreign investments in the country, it struck down IKEA's plans to set
up its famous cafes in the stores citing laws that don't allow FDI in food.
Later the government gave approval to IKEA to set up restaurants as part
of its stores only to be consumer in the stores.

I personally think it will benefit the retailers more because now they can
expand their business as there is 100% fdi allowed.

CHETAN R BAGRI
1520410
2BBA-D