NEW DELHI (TIP): The Modi government has made it clear it would not open the doors for FDI in multi-brand retail in India. Commerce minister Nirmala Seetharaman said in Rajya Sabha on August 13 that the BJP government was voted to power on the basis of the party’s election manifesto which clearly said it is against FDI in multi-brand retail. “The mandate given to government is on the basis of our manifesto … we do not entertain FDI in multi-brand retail,” she said.

The government though is yet to initiate any move to scrap the UPA-II government’s decision to allow FDI in the same sector. She said FDI flows have not been consistent in the past few years. “During the last three years FDI inflow has fluctuated. FDI inflow decreased by 26.33% in 2012-13 and increased by 6.12% in 2013-14,” she said.

FDI flow is dependent on the business environment and how decisions are made, she said, adding it has been skewed in favour of Mauritius which accounted for $80.809 billion out of $222.89 billion that came to India between 2000 and 2014. “We are using FIPB (Foreign Investment Promotion Board) to carry out check (on investing companies),” she said. Even in sectors where FDI is allowed under automatic route, Reserve Bank of India (RBI) scrutinises the funds flow, she said.

RBI and department of revenue, through FIPB, scrutinise investments coming into India, she said. “Under the liberalised economic environment, investment decisions of investors are based on the macro-economic policy framework, investment climate in the host country, investment policies of the trans-national corporations and other commercial considerations,” the minister said.