News: Indian govt readies 3-Pt plan for retail FDI
(TNN 27/05/2006) New Delhi - In case your are waiting to shop at Wal-Mart, Carrefour and other multi-brand retail stores in the country for your household needs such as grocery, you need to be a little patient.
The government is working on a three-pronged model for allowing FDI in retail in the multi-brand segment. The commerce ministry is looking for a model that can meet three conditions: employment, technology upgradation and increase in production capacity.
In fact, it is the first condition that is of utmost importance to the government. “The new FDI policy being explored needs to ensure that FDI in multi-brand retail adds to employment in the country and does not displace existing businessmen,” a senior government official told ET.
“As far as increasing the production capacity is concerned, it is a logical consequence of allowing big retail chains to operate in the country as these work on economies of scale,” the official added. However, to play safe, the government is working on a policy model that will incorporate the condition in the FDI policy for multi-brand retail.
As far as upgradation of existing technologies is concerned, experience tells us that post-liberalisation, new technologies have made their way into the domestic market, another official in the department of industrial policy and promotion added. But the government is still looking for a model that this condition is also met.
While experts formulate the policy for FDI in multi-brand retail, private retail players will be allowed to start operation. This will give policy makers a chance to assess the impact of big retail chains on the mom-and-pop stores, or kirana shops. Already, players such as Big Bazaar and Food Bazaar have opened outlets in various cities.
The government is working on a three-pronged model for allowing FDI in retail in the multi-brand segment. The commerce ministry is looking for a model that can meet three conditions: employment, technology upgradation and increase in production capacity.
In fact, it is the first condition that is of utmost importance to the government. “The new FDI policy being explored needs to ensure that FDI in multi-brand retail adds to employment in the country and does not displace existing businessmen,” a senior government official told ET.
“As far as increasing the production capacity is concerned, it is a logical consequence of allowing big retail chains to operate in the country as these work on economies of scale,” the official added. However, to play safe, the government is working on a policy model that will incorporate the condition in the FDI policy for multi-brand retail.
As far as upgradation of existing technologies is concerned, experience tells us that post-liberalisation, new technologies have made their way into the domestic market, another official in the department of industrial policy and promotion added. But the government is still looking for a model that this condition is also met.
While experts formulate the policy for FDI in multi-brand retail, private retail players will be allowed to start operation. This will give policy makers a chance to assess the impact of big retail chains on the mom-and-pop stores, or kirana shops. Already, players such as Big Bazaar and Food Bazaar have opened outlets in various cities.
posted by InCar Group Press Room at 13:27
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