The policy reversal could impact Delhi’s FDI-friendly image with the city's consumers being amongst the top spenders in the country.

The Arvind Kejriwal-ruled Delhi government has decided to withdraw Foreign Direct Investment (FDI) in multibrand retail. On Monday, the Aam Aadmi Party (AAP) government informed the Centre of its decision to renege on its predecessor, the Sheila Dikshit dispensation’s approval of the policy.

Monday’s policy reversal could impact Delhi’s FDI-friendly image. Delhi consumers being amongst the top spenders in the country made the State an attractive destination for FDI in retail. The State is also amongst the biggest receivers of FDI.

Chief Minister Arvind Kejriwal told reporters that his government was not opposed to FDI but the decision had to be taken as it was part of the AAP’s manifesto.

Mr. Kejriwal said the experience in other countries did not corroborate the case made by the UPA government at the Centre in favour of retail.

“FDI in retail leads to job losses,” he said. “We agree that FDI in retail improves consumers’ choices to an extent but the AAP does not wish to increase unemployment ... Delhi is not prepared for FDI.”