Govt Set to Open up FDI in Retail

• Email
• Print
• ( 1 )
• 

Opening up of FDI will usher in a new era of high-tech retail in India’s big and small cities

With government likely to give its green signal to FDI in retail within India, after years of debate, foreign direct investment in retail may soon be a reality here with a panel of secretaries expected to approve the framework for allowing global retail chains to set up shop in India.
Government sources say that the proposal on FDI in retail has gained momentum, with both Prime Minister Manmohan Singh and finance minister Pranab Mukherjee backing it up, and chances are that the Cabinet could clear the proposal in August. This could very well be enough to set an ideal platform for the entry of large global retail chains by the end of the current
financial year.  As far as IT industry is concerned, this could mean that we can look forward to concept retail stores from global biggies such as Apple, Dell, HP or even Microsoft.
If all goes well, the government is likely to permit foreign direct investment (FDI) in the multi-brand retail sector from April 2012 and is expected to come up with a final draft of a proposal in this regard by the end of July.
This would come as a big relief to global retailers like Walmart etc which have been waiting for years to move into India's multi-brand retail sector, which according to a Boston Consulting Group (BCG) study is estimated to be worth to the tune of $28 billion (Rs 125,000 crore).  According to the sources close to the industry, the government has already prepared a draft
for 49 per cent FDI in multi-brand retail.
According to the industry experts, the government is likely to allow FDI in three phases. In the first phase, foreign multi-brand retail chains will be allowed in the big metro cities of New Delhi, Mumbai, Kolkata and Chennai. In the second phase other metros like Bangalore, Hyderabad and Pune etc will be included.
As the Committee of Secretaries (CoS) is all set to meet next week to finalize the draft proposal, the future for retail in India looks bright. It may be recalled that earlier in 2009, the parliamentary standing committee on commerce had submitted a report against FDI in retail. It had recommended a blanket ban on domestic corporate heavyweights and foreign retailers
from entering the retail trade in grocery, fruits and vegetables, and restrictions imposed on opening large malls by them for selling other consumer products.