India Inc hails decision on multi-brand retail

Investors and India Inc on Friday hailed the decision to throw open the retail sector to foreign players, saying it will bring global investors’ confidence back in the India growth story.

The decision is expected to help improve capital flows into the country, which in turn would improve fiscal and current account deficit situations, CII president Adi Godrej said.
Ficci president R V Kanoria said the decision sent a signal to the investor community that India was committed to furthering reforms.

Assocham secretary general D S Rawat said opening up of retail to foreign investors will dispel the impression of any policy paralysis in government,

Bharti Enterprises Vice-Chairman and Managing Director Rajan Bharti Mittal and Future Group Founder and CEO Kishore Biyani were of the opinion that the decision, among other things, will help create more job opportunities in India and boost growth prospects.
Along with this, the Cabinet also changed two key conditions for permitting foreign direct investment in single brand retail.

In place of the rule requiring foreign retail chains to procure 30 per cent of the value of goods from MSMEs, village and cottage industries, artisans and craftsmen, the new rule says there will be no compulsion on buying from these sectors.

Under the new rule, 30 per cent of the value of goods purchased, will be done from India, preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors, where it is feasible

The other change relates to owner of the brand. Earlier, the rule required the foreign investor must be the owner of the brand. But, under the new rule, only one non-resident entity, whether owner of the brand or otherwise, shall be permitted to undertake single brand retail trading in the country, for the specific brand, through a legally tenable agreement, with the brand owner.