The newly formed government in Delhi has banned Foreign Direct Investment in retail, becoming the first Indian state to do so after the central government made provisions to allow foreign investment in mutli-brand retail.
The ban is a reversal of the Congress ruled government which was ousted from power in Delhi by the Aam Aadmi Party. Arvind Kejriwal, the Chief Minister of Delhi was against FDI in retail from the start and it was part of the party’s manifesto.
India relaxed retail FDI norms in September last year to allow foreign ownership of multi brand retail in India. However, FDI was not allowed in e commerce. However, a final decision was left to the state governments.
The Indian government’s Department of Industrial Policy & Promotion is now consulting various stake holders to finalize on the FDI norms in retail. Final FDI rules are likely to be announced in March 2014.