In a bid to cash in on the booming organised retail sector in India, the US Department of Commerce on Wednesday said it would approach the Indian government seeking a relaxation in the retail Foreign Direct Investment (FDI) norms. Currently, India allows a 51 per cent FDI in single-brand retail and 100 per cent in cash-and-carry stores such as Metro, which can only sell to other retailers and dealers. Interestingly, India doesn’t yet allow FDI in multi-brand retailing. Industry associations such as FICCI have been requesting the government to raise the FDI limit to 100 per cent in single-brand and to about 51 per cent in multi-brand retail. “The Indian government is looking at relaxing norms in insurance sector.

They should also look at curbing retail restrictions too,” said Nicole Y Lamb Hale, assistant secretary for Manufacturing and Services for the International Trade Administration, US Department of Commerce. Interacting with the media on her first franchising trade mission to India, Nicole said that as a result of tighter FDI norms, the business was less attractive with reduced opportunities for multi-national companies. “We want to enter beneficial businesses that include clean energy, power, retail, services, textile and space technology apart from franchise,” she said. According to the US Department of Commerce, the franchisee market in India is growing at a about 30 per cent and is estimated to touch $3.3 billion.

Meanwhile, US export to India increased 17 per cent to $19.2 billion, while total trade between two countries touched $48.7 billion registering a 30 per cent growth. And as the organised retail business picks up momentum, franchising is expected to grow to about 50 per cent of the overall organised retail trade. But on the other hand, deliveries in aircraft reduced 48 per cent in 2009 as a result of which, business could not reach the targeted $20 billion.