President Barak Obama has asked India to lift its restrictions on the FDI on multi-brand retail. He explained that old concerns that small shopkeepers would be impacted ignore today’s reality.
“Going forward, commitment must be matched by steady reduction to barriers in trade and foreign investment from agriculture to infrastructure and from retail to telecommunications,” he said.
Those present in the discussion were Anand Sharma and the planning commission deputy chairman Montek Singh Ahluwalia. At present, India allows 51 per cent foreign direct investment in single-brand retail and 100 per cent in cash-and-carry stores that can only sell to other retailers and businesses, but not to individual buyers who buy for home consumption.
Thomas Varghese, chief executive of Birla Retail, laid emphasis on the growth prospects of the entire industry as it would encourage building up the back-end infrastructure.
For several retailers globally, Indian market is one of their last bastions for growth primarily due to stagnation in consumer demand in their home countries as compared to strong double digit in India.
Though, lots of views have been taken up by the commerce ministry by rolling out a discussion paper on this subject, it is the government at the end who has to reach to the final conclusion.