The FDI notification on multi-brand retail by the government will be valid only if amendments made by the Reserve Bank in the FEMA rules are approved by Parliament, the Confederation of All India Traders (CAIT) has said.

"The FDI notification can be valid and effective only if the amendments made by RBI in rules and regulations of Foreign Exchange Management Act,1999 (FEMA) are approved by "each house" of Parliament which is an inherited provision in Section 48 of the FEMA Act," CAIT Secretary General Praveen Khandelwal said in a statement.

He added that the said provision is explicit and does not have ambiguity or discretion. "The government is terming it merely as an executive order which does not need approval of Parliament is factually a distortion of facts," Khandelwal said.

The statement said that CAIT in a communication to all Parliamentary Party Leaders has drawn their attention to the provision of Section 48 under which such amendments must be passed within 30 days from the date of its introduction in Parliament.

As per parliamentary procedure any such amendment will go to Committee on Subordinate legislation of each house which will scrutinise the same and will submit its report to Presiding Officer of their respective house and then house will decide the issue, it said.

Khandelwal said that calling the notification an enabling policy for the states to decide whether to implement the same or not is misleading.

The statement said that the GATS agreement under WTO and 82 Bilateral Investment Promotion Treaties signed binds the Government to provide "national treatment" to foreign investor which implies that no discrimination can be made

between a domestic company and the foreign investor. "Therefore, the states have no choice," it added.