FDI in retail "temporarily frozen": sources

New Delhi, Feb 9 (UNI) Taking cognisance of the objections raised by United Progressive Alliance Chairperson Sonia Gandhi in a letter to the Prime Minister's Office (PMO) on January 11, the Commerce Ministry has "temporarily frozen" plans to pursue foreign direct investment (FDI) in retail, informed sources said here today.

Mrs Gandhi's letter to the Government on entry of foreign players in the retail trading sector has been considered in the Ministry which is eager not to rush headlong into opening the sector to retail biggies without due caution.

While the FDI policy in retail has not been dumped outright, the decision to go slow in inviting FDI arises out of a desire not to have the policy rebound on the ruling Congress party, the sources said.

Meanwhile, the Ministry is believed to have circulated a draft cabinet note to hike FDI in specific product categories such as electronics, stationery and sports goods to 51 per cent.

FDI in specific product category goods is not expected to generate the storm of protest as would the proposed entry of retail giant Wal-Mart through a joint venture with Bharti Enterprises which is feared would threaten the hundreds of thousands of neighbourhood kirana stores.

The joint venture agreement is slated to be signed between Wal-Mart and Bhartis by month-end.

UNI