News: Changes in Indian retail FDI policy soon

(BL 10/01/2007) New Delhi - Changes in the Foreign Direct Investment (FDI) policy in the retailing sector can be expected very soon, with Kamal Nath, Union Minister of Commerce and Industry, saying, "You won't have to wait very long for changes in the FDI retailing policy to come through."

He was addressing presspersons at the launch of the India Retail Report 2007. "We have been looking at various sectors that need both domestic and foreign investments. We are also in discussions with the Prime Minister on various aspects of FDI in the sector that would include single brand as well as specialised goods retailing like sports goods, electronics and stationery." The PM had recently asked the Commerce Ministry to prepare a special Cabinet note to allow retailing.

It was important for the Indian retail industry to integrate the unorganised retail market with the organised and find a way out to strengthen the local kirana stores to the benefit of the consumers, rather than wipe them out. He also said that the retail industry in the future would become one of the largest sources of employment, generating around 15 million jobs within the next few years.

Fast growth

The sector was growing at a much faster rate than was expected and at this rate he expected the sector to be worth around Rs 2,00,000 crore by 2010. "The real strength of the sector lies in the emerging domestic retailing brands," he said.

The Ministry, since giving the go-ahead of 51 per cent FDI in single brand retailing, has allowed foreign brands such as Louis Vuitton, Damro, Lladro, FabInida Overseas and Figurines to set up shop in India. It also has rejected the pleas of three foreign brands to enter through the single brand-retailing route, he said.