Global firms await govt notification for a share in $500bn desi retail pie

Chennai:

International businesses are vying to have a share in India’s $500 billion retail sector and are eagerly awaiting government’s notification on allowing 51 per cent foreign direct investment (FDI) in multi-brand retail which is likely after the monsoon session, according to an expert from global financial management consultancy.

At an International conference on retailing organized by Federation of Indian Chambers of Commerce and Industry (FICCI) and Madras University here on Thursday, Rachna Nath, executive director (leader, Retail and Consumer) of PricewaterhouseCoopers (pwc) warned that if the government fails to notify FDI in multi-brand retail after the monsoon session, then opening up of retail sector to foreign direct investment will face a major hurdle with parliamentary elections expected in next two years.

The current estimated value of Indian retail sector is about $500 billion and is pegged to reach $1.3 trillion by 2020, according to a study “Indian Kaleidoscope Emerging Trends in retail’ which was conducted by FICCI and pwc.

Interestingly, countries like United kingdom is keen to see the retail sector open up. British Deputy high commissioner Mike Nithavrianakis said at the conference that several British companies are closely following the developments both at Centre and the state. He said Tamil Nadu could play a leading role in opening up the retail sector. “The state will benefit as it is the most urbanized state having 53 cities,’ he added.

“The state has a fast growing middle class and it has a opportunity to lead. Britain is ready to support retail sector in the state,” he added while highlighting how the retail sector helped shape British economy.

Chairman and managing director of Indian Overseas bank M Narendra stressed on the need for inclusive growth. He said while allowing more than 51 per cent FDI in multi-brand retail one should ensure people from all classes have access to it. However, he stressed on the need for foreign direct investment due to slowdown in economy.

FICCI chairman Tamil Nadu State council Rafeeque Ahmed said that this conference aims to identify key issues and recommend possible solutions that would directly and positively impact on the growth of retail sector.