States have prerogative not to allow FDI in multi-brand retail: Government

September 18th, 2012 - 8:12 pm ICT by IANS  

New Delhi, Sep 18 (IANS) Amid growing protests against its decision to allow foreign direct investment (FDI) in multi-brand retail, the government Tuesday said the implementation of the policy remained a prerogative of the states.

“The recently approved policy on FDI in multi-brand retail trading provides, inter-alia, that it would be the prerogative of the states to allow a multi-brand store,” the commerce and industry ministry said in a statement.

The main opposition Bharatiya Janata Party had Monday accused the government of policy fraud, saying the states were not in a position to stop foreign retailers like Walmart and Carrefour from setting up their stores.

However, the ministry clarified that the policy would be applicable to only those states who are desirous of implementing it.

“The local and state-level regulations which govern shops and establishments are the prerogative of the respective state governments. The policy explicitly acknowledges this position,” the statement said.

The federal cabinet last week took a decision to allow up to 51 percent foreign direct investment in multi-brand retail.

The statement also clarified that the state governments’ decision of not allowing FDI in multi-brand retail won’t violate any of India’s international obligations.

“The decision does not violate any commitments/obligations arising out of India’s international agreements,” the statement said.

The opposition parties and some of the allies of the ruling United Progressive Alliance (UPA), notably Mamata Banerjee-led Trinamool Congress, have been protesting against the decision.

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