FDI Policy in India: With Special Reference to the Multi-Brand Retail FDI Policy

Abstract

This article attempts to trace the FDI policy in India from India’s Independence till the economic liberalisation in 1991 and onwards. It highlights how different regimes approached the FDI policy in India, from ‘hostility’ to ‘accommodation’ to ‘collaboration’. The article then looks at the multi-brand retail FDI policy which was recently introduced in India. This policy was one of the hallmarks of the United Progressive Alliance (UPA II) regime and marked a significant push towards a more extensive economic reforms programme. It clearly stated that if this policy is operationalised, it will result in a big boost in investments in our country. However, most of the Indian states, the Left parties and various regional parties opposed the introduction of FDI in the multi-brand retail sector. They stated that this policy would harm the Indian economy in the long run. The article also focuses on two important stakeholders of this policy, namely the farming sector and the unorganised retailers. It looks at the advantages and the disadvantages of the multi-brand retail FDI policy on these two sectors along with their responses.