Big retail gets negligible FDI: Commerce ministry

Despite the controversy over the entry of foreign retail giants, the government has cleared foreign direct investment  worth only $3.1 million in retail between February 2006 and May 2007.

In a note prepared in response to questions raised on FDI in retail, the commerce ministry said it had cleared 17 projects of single-brand product retailing, a majority of them in the fashion and ready-to-wear business.

Most of these companies are looking at minimal investments in setting up their retail stores.

For instance, Louis Vuitton, which will sell products such as pens, shoes and bags under the premium LVMH brand, will invest only Rs 3.32 crore (Rs 33.2 million), Moja Shoes Rs 2.6 crore (Rs 26 million) for a 20 per cent stake and Grotto Rs 3.82 crore (Rs 38.2 million) for 50 per cent.

The low level of FDI inflow is significant given the widespread opposition to big retail in general and foreign retailers in particular.

Several states like Uttar Pradesh, Kerala and West Bengal have seen widespread local protests over fears that big retailers, Indian or foreign, would deprive small neighbourhood stores of their means of living.