Vishal Krishna Businessworld, December 10, 2011 The government blinked. After battling the political opposition for about two weeks, the government backed down from introducing a policy allowing foreign direct investment (FDI) in multi-brand retail. The expectations of corporate India and the people at large were belied; you could hear the collective whoosh of disappointment. Then came some repressed anger, especially among captains of industry, at the political wrangling over what many of them see as a policy that is in the public interest. Others were cynical. “It was expected,” says Shrinivas Rao, CEO (Asia-Pacific) of Vestian Global, a real estate…
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Indrajit Basu China Daily Asia Pacific, December 2, 2011 Some predict it will herald a consumer revolution in the huge retail sector, some forecast doom for countless small traders and farmers. The country’s business and political class has been divided down the middle ever since the central cabinet decided to throw open the retail sector to foreign investors. While the industry calls it a “landmark decision”, the United Progressive Alliance (UPA) government is feeling the heat, both from outside and within. Opposition parties as well as some key UPA allies demand an immediate rollback, or else they threaten to paralyze…
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The Times of India Bangalore, December 1, 2011 Traders in Karnataka are livid at the Centres move to allow 51% FDI in multi-brand retail. The state is home to lakhs of processing units which, traders fear, might take a hit. The FDI in retail creates predatory pricing, says Bharath Shah, vice president, southern chapter, Confederation of All India Trades (CAIT), New Delhi. Karnataka, for instance,has over 25 lakh processing units involved in dehusking and processing dal. Big retailers are capable of sourcing close to 30,000 bags of these on a daily basis, whereas a kirana owner can manage only 200.…
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Shuchi Bansal, Abhilasha Ojha & Gouri Shah MINT, New Delhi/Mumbai, November 30, 2011 Indians who can afford the good things in life may soon be able to browse for exclusive labels without having to leave the country following recent changes in investment rules. The controversy that’s been touched off by retail reforms has been focused on the key decision to allow 51% overseas investment in multi-brand retailing. The move to increase the 51% limit on foreign direct investment (FDI) in single-brand retail to 100% hasn’t attracted as much attention, but could see a change in existing relationships plus lead to…
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Eric Johnson American Shipper, November 28, 2011 The Indian government last week opened its doors to multinational retailers through a relaxing of foreign direct investment regulations. The government has proposed allowing single-brand retailers (such as the furniture giant IKEA) to wholly own stores in India, while multi-brand retailers (like Wal-Mart and Carrefour) can own a 51 percent stake. Previously foreign single-brand retailers could only own a 51 percent stake in a joint venture with a domestic company, and multi-brand retailers could not hold any stake in front-end retail operations. The moves, which have yet to be formalized, could greatly impact…
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