RETAILERS across the world must have been enthused when the government threw open multi-brand retailing to foreign players in September 2012, allowing them a majority stake of 51pc. Eight months later, most of them are confused about what exactly the policy says. … Does this 50pc criterion apply only to the investments brought in the first year or does it apply to all the investment brought in over the life of the investment? None of this is clear, but what is clear is that different interpretations are being given to the media by top government officials as well as politicians. … Which is why eight months after the multi-brand retail policy was announced, there has been no application made to the government. …

Which is why the government needs to come out with these clarifications in writing through changes in the policy documents or press notes that deal with this. Let’s not forget that in the case of intra-circle roaming in 3G, the government … indicated that such roaming was permissible — today, however, the government has changed its mind on the matter.

Apart from this, the government needs to show some flexibility on the policy announced. … In addition, the government needs to appreciate how multi-brand retail is conducted the world over. Most retailers, for instance, do not run all of their cold chains and instead operate with a series of specialist logistics companies who handle large parts of their back-end infrastructure. Often, e-tailing is an integral part of the business, but this is not allowed in India. In an equally large number of multi-brand retail ventures, the kind of back-end infrastructure the government is envisaging is not even required. If these business realities are ignored and the government wants big retailers to come and set up, for instance, their own back-end infrastructure, it may be in for a big disappointment.—(May 18)