Retailers hail 51% retail FDI

Retailers hail 51% retail FDI

Say will curb inflation, modernise sector

Retailers hail 51% retail FDI

“It is a welcome move and I think step by step we are moving closer to opening the multi-brand retail in India to FDI. This will invite a lot of interest from retailers world over,” Kishore Biyani CEO Future Group said.

He said the company may look at having strategic tie-ups with international retailers in home, electronics and sports segments.

The Committee of Secretaries (CoS) is understood to have suggested opening up of multi-brand retail sector to foreign investments with a cap of 51 per cent and a minimum investment of US$100 million by overseas players.

Rei Agro Managing Director Sundip Jhunjhunwala said “This issue has been pending for a long time. The latest decision should expedite the process of the relaxation of retail FDI norms. FDI will help in strengthening efficiencies in the supply chain.”

Politically sensitive

Retailers Association of India CEO Kumar Rajagopalan said: “It is a welcome step. However, we need to get into finer details. We have to understand if there are any riders and what will be the repercussions of the same.”

As per the latest recommendations of the Committee of Secretaries, overseas mega retail chains will have to pump in at least half of their investment in the back end supply chain. The politically sensitive issue will soon be taken to the Cabinet. Industry bodies, including CII and Assocham have also welcomed the move.

“We can begin with 51 per cent and gradually open up the sector. It will help in building up a strong retail link, will help trade and supply chain,” CII Director General Chandrajit Banerjee said.

He added that one does not see a threat or a strong impact on mom and pop shops as people will continue to go there, and Kirana shops and these stores can co-exist.
Assocham Secretary General D S Rawat, however, said the move will affect mom and pop stores in the country.

“The business confidence will grow. It will definitely benefit the farmers as well as consumers, besides attracting more investments... However, there will be an impact on small kirana shops,” Rawat said.

Echoing the sentiment Federation of Indian Small and Medium Enterprises (FISME) President V K Agarwal said, “Kirana stores may be marginally affected. Any massive change or event in the country creates some disturbances. It is definitely going to create ripples.”

Opening up multi-brand retail for up to 51 per cent foreign direct investment would help curb inflationary pressure and modernise the sector.

“It is a great decision. We want this to happen as soon as possible,” Rajiv Kumar, Secretary General Federation of Indian Chambers of Commerce & Industrysaid.
“Getting foreign investment is one part, but the real benefit will be that it will help modernise the retail sector and control food inflation, a big problem at the moment,” said Kumar.

Analysts argue that given the size of the Indian market there is enough space for small retailers as well as big supermarkets to flourish side by side.

Traders to protest proposed move

New Delhi, pti: Opposing the suggestion of Committee of Secretaries to allow 51 per cent FDI in multi-brand retail, Confederation of All India Traders said the move will adversely affect “crores” of small shopkeepers.

“CAIT wil hold a protest dharna at nearly 100 paces in different states of the country on July 26,” the traders association said in a statement.

“The move will adversely affect crores of shopkeepers and also badly hit people who are dependent upon retail trade for their livelihood,” CAIT National President B C Bhartia said.

The Association alleged that the CoS recommendations came after strong lobbying by the global retailers and domestic corporate houses.

“The CAIT delegation will soon meet leaders of political parties and chief ministers of all the apprise them about the apprehensions and concerns of the trading community,” it said.