New Delhi: After the cabinet approval of FDI in single brand retail, foreign companies have begun lobbying to wade off the compulsion of buying from the domestic market. However, the government has denied any possibility of relaxing the rules.

According to sources, the retail companies want the government to liberalise the rule of purchasing 30 percent of the total goods from the domestic market.  On the other hand the Ministry of Commerce and Industry said, “The government’s decision has come up with a motive of safeguarding the domestic industry; therefore there is no possibility of reconsideration.”

It is believed that due to the compulsion of buying goods from the domestic market Swedish home furnishing company IKEA has put its decision on hold for carrying forward its plan of investment in India. Similarly, many other multinational companies are contemplating of withdrawing their investment plans.
On the other hand officials of the Ministry of Commerce and Industry informed that many foreign companies are already purchasing goods from the Indian market and therefore the government’s decision will not have any significant effect on them.

Minister of Commerce and Industry, Anand Sharma in a conversation with Dainik Jagran clarified that many companies are already buying 30 percent of their goods from the Indian market and that IEKA is one of them.

The Central Government on November 24, 2011 gave the nod for 100 percent FDI in single brand retail. Also, the government announced 51 percent FDI in multi-brand retail which was strongly opposed by the Opposition and other groups across the nation. This led to the withdrawal and postponement of the government’s decision in multi-brand retail. In both of its decision government had posed the condition of buying 30 percent of the goods from the domestic market.

JPN/Bureau