Parliament panel says FDI in retail may not benefit MSMEs

Observing that in multi-brand retail sector may not benefit Indian MSMEs, a Parliamentary panel has asked the MSME Ministry to commission a survey to gauge the impact of earlier FDI policies on the sector.

“The Committee is of the opinion that the FDI for retail may not have beneficial impact on the MSME sector,” Committee on impact of foreign direct investment (FDI) in multi-brand retail on MSME sector said in its report.

The committee suggested the MSME Ministry to commission a survey to assess the benefits and losses of previous FDI policies on the MSME sector to ascertain if FDI policy so far has created any back-end infrastructure, imparted skills to domestic manpower or upgraded managerial skills.

Highlighting that the government has not conducted any study on the impact of FDI since 1997, the Committee said the debate in reflects lack of consensus on the impact of FDI in various emerging economies and it was inaccurate to state that discussions generally indicated support for FDI.

The central government had permitted 51 per cent FDI in multi-brand retailing in September 2012, leaving its implementation to the states.

So far, only UK-based Tesco’s proposal to invest in the sector has been approved by the Centre.

The Committee is chaired by Member of Parliament in the Rajya Sabha K C Tyagi.