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

After the recent reform, Delhi will become the main city in India able to attract FDI in multi-brand retail. Precisely in order to encourage the attraction of Foreign Direct Investments in the retail market, the city Government has begun the process of simplifying some regulations and has announced that amendments will be prepared to the Agricultural Produce Marketing Committee (APMC) Act, thus allowing a direct connection between final purchasers and producers.

"We have consulted with various interested parties on the issue," said Public Works Department minister Rai Kumar Chauhan, after a meeting with representatives of the major mandis (large wholesale fruit and vegetable markets), the operation of some of which takes place under its control.

Currently, producers cannot sell their products directly to retailers, as the exchange must go through so-called mandis. Sheila Dikshit, chair of the Agricultural Produce Marketing Committee, strongly endorsed the decision to allow FDI entry into multi-brand retail, and said last week that the reform would be implemented in the city of Delhi within the next fiscal year. .

Some government officials said the government will have to make changes to the APMC law to break the monopoly of wholesalers so that retailers can buy produce directly from farmers. As with the Foreign Direct Investment policy approved by the Cabinet, the final authority for granting the business license remains with the States under their respective Shops and Establishment Acts.

To break the monopoly of the Azadpur mandi, considered one of the largest wholesale fruit and vegetable markets in Asia, the government is also considering the possibility of marketing the production that takes place in privately owned fields. Some sources claim that the government is planning to build a wholesale market in the Tikri Khud area, located in West Delhi, where there are approximately 72 acres of land; moreover, it seems that the Government could even allow foreign retailers to insert shops in the area.

The states so far in favor of the recent reform are Maharashtra, Delhi, Jammu & Kashmir, Haryana, Rajasthan, Uttarakhand, Andhra Pradesh and Assam. Precisely in these States there are 19 cities (including Delhi, Mumbai, Pune, Nagpur, Jaipur, Hyderabad, Vijaywada, Srinagar and Guwahati) with more than one million inhabitants and according to the new FDI law, retailers will have the possibility of opening shops only in cities with a population of more than one million inhabitants.

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