Organised retailers in India have called for speeding up policy changes to allow FDI in multi-brand segment in the wake of an inter-ministerial group favouring such a move.
Future Group CEO Mr Kkishore Biyani told PTI that further opening of FDI in retail would help to set up strong systems and check inflation.
“We are all waiting,” he said referring to a recommendation by the inter-ministerial group (IMG) on inflation headed by Chief Economic Advisor Mr Kaushik Basu for opening up multi-brand retail to foreign investors and changes in agriculture marketing laws to check the rate of price rise.
“In the new India there is a demand for various goods and services for which there is a need to build new systems and modern retail can do that,” Mr Biyani added.
Calling for urgency in relaxing the FDI norms further, Retailers Association of India CEO Mr Kumar Rajagopalan said: “We have been mooting this idea (relaxation of FDI) for a long time now and there is an impression that the government is serious about it, but there has been a lot of delay.”
He said FDI in retail should be able to bring retailers to invest in back-end and supply chain. “A robust supply chain will narrow the gap between producers and retailers. This will bring down the number of transactions, thus bringing down the prices for consumers,” Mr Rajagopalan added.
He, however, said there is uncertainty among the retailers as to when FDI in multi-brand would be allowed. “We do not know when will it really happen...,” he said.
Last week, describing the Indian retail sector as “primitive”, the IMG on inflation had suggested that FDI in the multi-brand retail should be allowed at the earliest to check rising prices.
“India’s retail sector continues to be primitive...Its time for India to allow FDI in multi-product retail and IMG recommends that the government consider this at the earliest,” Mr Basu had said.
While FDI is not allowed in multi-brand, India allows 51 per cent foreign investment in single brand retail and 100 per cent in wholesale cash and carry format.
REI Agro Vice Chairman and MD Mr Sandip Jhunjhunwala said: “(Further) Opening of FDI is a welcome step. There is a huge difference between prices at the farm level and what consumers eventually pay. FDI will only help in checking inflation.”
REI Agro operates a chain of around 500 ‘6Ten’ retail outlets across India to sell fruits, vegetables, grocery items and other products.