Retail FDI To Bring More Choices For Consumers.

While consumers can look forward to more choices from an entire host of retail chains that are expected to enter the Indian market, the industry will be able to fund large scale expansions when retail is finally opened up to FDI. These prospects became brighter as a result of the committee of secretaries recommending 51% FDI in multi-brand retail formats.

Apart from opening up doors for the likes of Wal-Mart and Carrefour, which have been waiting in the wings for years, it would eventually also benefit small and marginalized farmers as well, industry experts who spoke to TOI said.

According to Thomas Varghese, chairman, CII National Retail Committee and CEO, Aditya Birla Retail, "The move will bring in the required funds from all kinds of foreign investors into modern retail which was till date stymied for funds." Varghese said that once the funds come into India through the FDI route, it will usher in a phase of expansions. Once cleared, the move would offer Indian companies the option of selling a part of their stake to foreign companies enabling them to become debt-free. "For us as a company, the option to sell a stake comes into play in order to make ourselves debt-free. The FDI will throw open opportunities which will enable us to sell a stake and raise funds," said Kishore Biyani, chairman , Future Group, India's largest retailer which operates stores like Big Bazaar and Food Bazaar.

"For us, categories like home, electronics will gain immensely if we bring in a partner. The industry has the potential and, with the opening up of the sector, can grow faster," said Biyani, who hoped that closure on the much-awaited policy change was just a step away.

"This has been ongoing for the last four years so I am not surprised. But now we are more positive that this will be a reality soon. As far as the opening of multibrand retail goes, we as a retailer think it will speed up the business prospects of the overall industry," said Biyani.

Sanjeev Goenka, chairman RP-Sanjiv Goenka group, which owns the Spencer's retail format is also enthused. "It is something which is going to benefit the organized retail industry in India," he said. According to Varghese, the move will empower small and marginal farmers whom Indian and foreign retailers could directly source the produce from. "It will open up a lot of opportunities for farmers. This will also bring down inflation. The government has already been asking state governments to follow the model APMC Act," he said.

Source : timesofindia.indiatimes.com