India: Delhi poised to attract FDI in multi-brand retail

Following the recent reform, Delhi will become the main city in India capable of attracting FDI in multi-brand retail. Precisely in order to incentivize the attraction of Foreign Direct Investment in the retail market, the city government has begun the process of simplifying some regulations and has announced that amendments to the Agricultural Produce Marketing Committee (APMC) Act will be prepared, thus allowing a direct connection between end buyers and producers.

“We have consulted with various stakeholders on the issue,’ said Public Works Department Minister Rai Kumar Chauhan, after a meeting with representatives from major mandis (large wholesale fruit and vegetable markets), some of which operate under his purview.

Currently, manufacturers cannot sell their products directly to retailers, as the transaction must go through so-called mandis. Sheila Dikshit, chairperson of the Agricultural Produce Marketing Committee, has strongly approved the decision that will allow FDI in multi-brand retail, and last week said the reform will be implemented in the city of Delhi by next fiscal year.

Alcuni funzionari governativi hanno affermato che il Governo dovrà apportare modifiche alla legge APMC per rompere il monopolio dei commercianti all’ingrosso in modo che i rivenditori possano acquistare direttamente i prodotti dagli agricoltori. Così come per la politica di Investimenti Diretti Esteri approvata dal Consiglio dei Ministri, l’autorità finale per la concessione della licenza commerciale resta di competenza degli Stati sotto i loro rispettivi Shops and Establishment Acts.

To break the monopoly of Azadpur mandi, considered one of Asia's largest wholesale fruit and vegetable markets, the Government is also considering making privately owned farm produce available for sale. Sources suggest that the Government is thinking of building a wholesale market in the Tikri Khud area in West Delhi, where there is approximately 72 acres of land. Furthermore, it is rumored that the Government might even allow foreign retailers to set up shops in the area.

Gli Stati fino ad ora a favore della recente riforma sono Maharashtra, Delhi, Jammu & Kashmir, Haryana, Rajasthan, Uttarakhand, Andhra Pradesh e Assam. Proprio in questi Stati vi sono ben 19 città (tra cui Delhi, Mumbai, Pune, Nagpur, Jaipur, Hyderabad, Vijaywada, Srinagar e Guwahati) con più di un milione di abitanti e in base alla nuova legge sugli IDE, i retailer avranno la possibilità di aprire negozi soltanto nelle città con una popolazione superiore al milione di abitanti.

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