The Government decision to put on hold FDI in multi-brand retail may have disheartened the firms looking for an entry into the business, but it has not come as a surprise to them.
“We respect the Government's decision and look forward to a consensus being reached on FDI in multi-brand retail,” a Bharti Walmart spokesperson said.
In fact, last July, Walmart in its response to a discussion paper on foreign direct investment in multi-brand retail trading circulated by the Department of Industrial Policy & Promotion had said that though it believed that full opening of FDI in retail without restrictions was ‘ideal', it recognised the political sensitivity around the retail sector.
“Recognising the Government's stand to adopt a calibrated approach, we would endorse a position where as a first step, multi-brand retail is opened 49 per cent. Should the Government pursue this option, there should be clear path towards 100 per cent FDI in future,” Walmart India President, Mr Raj Jain, also Managing Director of its joint venture with Bharti, had written.
Mr Rajan Bharti Mittal, Vice-Chairman and MD, Bharti Enterprises, on Wednesday's decision said: “It is unfortunate that such an important and much needed economic reform has been suspended.”
He reiterated that allowing FDI in multi-brand retail will benefit the country immensely as it will bring investments into development of complete back-end infrastructure.
“More importantly, it will benefit farmers in the form of better realisation for their produce as well as better prices for the consumer. We hope that various stakeholders across the spectrum will take these facts into account, build consensus and allow this major reform to see the light of the day,” Mr Mittal said.
Mr Arindam Kunar, Vice-President, DLF Place, Saket, said: “The introduction of FDI in multi-brand retail would have led to increased demand, which in turn would catalyse more investment openings in the retail segment.”
The FDI policy would have resulted in billions of dollars of investment and the retail market would have spread more uniformly and lucratively for all concerned, Mr Kunar said.