Bharti Makes Last-Ditch Effort at Getting FDI into Retail.

With two weeks remaining for the government to start firming up its stand on allowing foreign companies to start retail chains, Bharti WalMart, the biggest foreign collaboration in retail, stepped up its efforts to get the restrictions removed.

The company, one of the strongest proponents for allowing foreign firms to compete with Indian retail giants, said it is even open to letting foreign companies into the smaller cities.

“There is a suggestion that foreign investment in retail should be allowed in cities of population of 1 million (10 lakh) or more. But we believe it has to be at least 2.5 to 5 lakh,” said Rajan Mittal, vice-chairman of Bharti Enterprises.

Mittal was responding to widespread fears expressed by small merchants — reflected in their written feedback to the commerce ministry — that big shops from foreign companies will wipe out small shops.

Mittal added that stores would be opened in only 120 cities in India if the government went for a 5 lakh population cut off for foreign retailers.

Mittal, along with Raj Jain, who heads the joint venture in India, attacked the double standards of the current policy which lets Indian corporate houses such as Reliance Industries and Aditya Birla group open chain stores, but prevents those with foreign collaborators like Bharti.

“Let us not discriminate based on the colour of the money. If indeed stores from companies like ours will damage small traders, so too would stores from all the Indian corporate houses,” he said.

Meanwhile, tens of merchants’ associations across the country have written to the ministry warning against letting foreign firms open stores in India. Interestingly, some of the big Indian chains such as Reliance Industries, Tata group and Aditya Birla group have kept mum on the ministry’s proposal to let foreign firms compete with them.

However, the biggest Indian chain, Kishore Biyani’s Future Group, is known to be in favour of allowing foreign investment in the sector, which is expected to let companies like itself compete better with cash rich competitors such as Reliance and Aditya Birla group.

It is also known that the commerce ministry, headed by Anand Sharma, is in favour of allowing partly foreign-owned companies such as Bharti WalMart to open retail shops, but is reportedly opposed by the finance ministry.

The commerce ministry will start processing the responses of different stake holders on October 15, before putting its proposal in front of the political leadership.

Source : dnaindia.com