PRESS TRUST OF INDIA
New Delhi, 21 July 
With a view to accommodating some demands of global retailers such as Walmart and Tesco, the department of industrial policy and promotion has circulated the draft of a Cabinet note, seeking views of different ministries to ease FDI norms in multi-brand segment.
According to sources, the DIPP has sought views on capping the minimum investment in back-end infrastructure to $50 million; allowing global retailers to open stores in cities with population less than 10 lakh; allowing foreign institutional investors in the sector and removing ambiguity regarding sourcing from small and medium enterprises after a unit crosses the $1 million investment mark.
The department has requested all the ministries concerned, including finance, consumer affairs and MSME, to reply soon, the sources said.
“The department would like to put the final note for consideration of the Cabinet this week,” said a source having knowledge.
If the Cabinet does not take any view on the matter this week, “it will be considered only after the Monsoon session” as the issue is “politically sensitive”, the source said.
Although DIPP, which deals with FDI related matters, has recently issued clarification on some of the issues, matters including sourcing restriction amongst group companies; need for 50 per cent investment in back-end infrastructure within three years of the first tranche of FDI still needs to be looked at.
“Clarity is also required on the requirement of 30 per cent sourcing from small industry. Whether sourcing from such small industry can be allowed towards fulfilment of this conditionality, if it outgrows, and if so, till what period?,” they added.