5. Conditions on FDI in Multi Brand Retail
Trading
Fresh agriculture produce may be
unbranded.
Minimum amount to be brought in by the foreign
investor would be US $ 100 Million.
50% of FDI to be invested in back-end infrastructure
within three years of the first tranche of FDI.
Consolidated FDI Policy, Circular 1 of 2013.
6. 30% sourcing from small and
medium enterprise.
Self-certification by company to
ensure compliance of conditions.
Retail sales outlets, may be set up in
cities with a population of more than 10
Lakh as per 2011 census.
Consolidated FDI Policy, Circular 1 of 2013
7. Government will have the first right of
procurement of agricultural products.
An enabling policy- the Government
would be free to take their own
decisions.
Retail trading in e-commerce not
permissible in multi-brand retail trading.
Applications to be processed by the
Department of Industrial Policy and
Promotion before Government approval.
Consolidated FDI Policy, Circular 1 of 2013
10. Case 1: PepsiCo India
-helping Farmers Improve yield and income
• Building PepsiCo‘s stature as a development partner by
helping farmers grow more and earn more
• Making world-class agricultural practices available to farmers
and helping them raise farm productivity.
• Facilitating financial and insurance services in order to de-risk
farming.
• Introducing sustainable farming methods and practicing
contact farming.
11. Development So Far
Today Pepsico farming programme
reaches out to more than 12,000 farmers
across six states.
They provide superior seeds, timely agricultural
inputs and supply of agricultural implements free
of charge.
They have an assured buy-back
mechanism at a prefixed rate with
farmers.
12. Through their tie-up with
State Bank of India, they help
farmers get credit at a lower
rate of interest.
They have arranged weather
insurance for farmers through
their tie-up with ICICI
Lombard.
13. Case 2: Bharti Walmart
-initiative through Direct Farm Project
15. Frequently Asked Questions
I. How will farmers be affected by the policy on
FDI in multi-brand retail trading?
Farmers will receive better remuneration for their
produce.
Better prices from the reduction in post-harvest losses.
FDI in multi-brand will result in strengthening of the
supply-chain infrastructure for all products.
With 50% of total Foreign investment in villages, would
transform India through improved agro-processing and
cold-chains .
16. Frequently Asked Questions
II. How will medium and small industries be
impacted by the policy?
With 30% sourcing from Indian small Industries,
small manufacturers will benefit.
Provide the necessary scales for the entities to
expand capacities in manufacturing.
Create more employment and strengthen the
manufacturing base of the country.
Enable the small enterprise to get integrated with
global retail chains.
17. Frequently Asked Questions
III. Will this policy force small retailers to shut
down?
Organized retail constitutes only 4% of retail trade
and co-exist with the small “kirana” stores and the
unorganized retail sector.
A strong competitive response from traditional
retail, through improved business practices and
technology up gradation.
Global experience also indicates that organized and
unorganized retail co-exist and grow.
18. Frequently Asked Questions
IV. How will the policy help the rural youth?
FDI in multi-brand retail trading will create a large
number of employment opportunities, in villages,
in the range of activities from the backend to the
frontend retail business.
19. Frequently Asked Questions
V. Does the policy have any safeguards against
predatory pricing?
A strong legal framework in the form of the
Competition Commission is available to deal with
any anti-competitive practices, including predatory
pricing.
Moreover, the calibrated approach in the policy will
make it difficult for the entities to stifle
competition.
21. Eventuality
Critical Analysis
Despite country wide
speculation on the
plight of small retailers,
India needs to take a lesson
from China where
organized and
unorganized retail seem to
co-exist and grow together.
India’s local enterprises
will potentially receive an
up gradation with the
import of advanced
technological and
logistics management
expertise from the foreign
entities.
It would lead to a more
comprehensive integration
of India into the worldwide
market and, as such, it is
imperative for the
government to promote
this sector for the
overall economic
development and social
welfare of the country.
