Retailers, experts say the next five years are critical for the growth of the retail industry in India

1. General election to decide the course
of FDI in retail
FIRST PUBLISHED: WED, FEB 05 2014. 05 06 PM IST
Retailers, experts say the next five years are critical for the growth of the retail industry in India
Suneera Tandon
Retailers and experts spoke on the first day of the Retail Leadership Summit 2014 in Mumbai on Wednesday.
B.S. Nagesh, chairman of industry lobby Retailer’s Association of India, said irrespective of which political
party or grouping comes into power, the retail industry will continue to grow–albeit at the local retailer or
modern trade.
Photo: Pradeep Gaur/Mint
Mumbai: The next five years will be critical for the growth of the retail industry in India because the result of
this year’s general election will decide whether or not global supermarket chains enter Asia’s third largest
economy, according to a clutch of retail industry experts.
Retailers and experts spoke on the first day of the Retail Leadership Summit 2014 in Mumbai on Wednesday.
B.S. Nagesh, chairman of industry lobby Retailer’s Association of India, said irrespective of which political
party or grouping comes into power, the retail industry will continue to grow—albeit at the local retailer or
modern trade level.

2. ―If the Congress comes to power, it will help many modern retailers who have been waiting to enter India, as
many states under the new government would allow for foreign investments in retail,‖ he told the two-day
meet. ―If FDI (foreign direct investment, in retail) does not happen under the Bharatiya Janata Party (BJP),
they will work for non-FDI retailers.‖
Two state governments—the BJP government in Rajasthan and the Aam Aadmi Party regime in Delhi—have
recently announced decisions not to allow FDI in supermarkets, reversing previous policy.
Barring British retailer Tesco Plc that is in a joint venture with the Tata Group, major supermarket chains such
as the Wal-Mart Stores Inc. of the US and French retailer Carrefour SA are yet to make up their minds about
entering the multi-brand retail sector in India.
Nagesh described the policy reversals by the two governments as disappointing. ―One is going against a
national policy. It is a wrong stance taken by the states as it does not present a good precedent for future
governments.‖
Some experts seemed sceptical about the importance of FDI in multi-brand retail.
―FDI in retail has no meaning any more, specially FDI in multi-brand retail… It is highly misconstrued in
India and is a media-created hype,‖ said Kishore Biyani, founder and group CEO at Future Group.
B.S. Nagesh shares his thoughts on FDI in retail.
Not many retailers were looking at FDI, said Biyani, whose Future Group has in the past held talks
with Carrefour. The talks, however, did not end with the two forging an alliance.
Biyani had denied any immediate association with a large foreign retailer in a recent interview.
On consumer goods, Sanjiv Mehta, chief executive officer and managing director at Hindustan Unilever Ltd,
said modern trade will continue to penetrate smaller towns and cities with or without foreign investment, but
that foreign investments will definitely speed up the process.
Small neighbourhood stores, he said, will continue to be relevant in India, largely driven by the convenience
associated with that retail format.
Even if a non-FDI supporting government were to assume power after the general election due by May,
Nagesh said, more steps should be taken to support the interests of smaller traders and farmers.
Source: http://www.livemint.com/Industry/BBxeOVRJHQZcuAd5oMmWQN/General-elections-to-decidethe-course-of-FDI-in-retail.html