New Delhi: Global
retail giants, including IKEA, Walmart and Carrefour, are studying the finer
details of India’s relaxed FDI norms for the sector as they look to tap
opportunities in the country.
In the meantime, while closely
watching developments post the changes, these firms are staying focussed on
their current operations in India that includes sourcing in case of IKEA, and
cash and carry businesses for Walmart and Carrefour.
Welcoming the government’s move to allow 100 percent foreign
direct investment (FDI) in single brand retail, IKEA said in an email
conversation to Firstpost, “We will now over the next few days look
into the details of the decision and we expect to present more information shortly
about our intention to establish retail operations.”
“India is since long a strong and
growing purchase market us,” IKEA added.Indian retail sector is currently
pegged at around $600 billion. Reuters
India is since long a strong and
growing purchase market for IKEA, the Scandinavian furniture retailer said in
an e-mailed statement to PTI.
Even French multi-brand retailer
Carrefour that has already entered India through the cash and carry route is
closely watching the developments taking place here.
“Carrefour will remain attentive
to the finalisation of this new regulation and continues the development of its
cash and carry operations,” the company said in a statement.
The French retailer currently
operates two cash and carry stores in India.
Carrefour welcomes the Indian
Government’s decision to allow up to 51 percent foreign direct investment in
multi-brand retail, it added.
Echoing similar views, Walmart
said it is willing to invest in back-end infrastructure that will help reduce
wastage of farm produce, improve the livelihood of farmers, lower prices of
products and ease supply-side inflation.
“We will need to study the
conditions and the finer details of the new policy and the impact that it will
have on our ability to do business in India,” Walmart India President Raj Jain
said.
Last week, the government approved
51 percent FDI in multi-brand retail, while completely opening the single brand
segment to foreign investors.
According to sector observers, the
foreign retailers will prefer to adopt a wait and watch policy before they make
any announcements about their plans in India.
“The picture is not very clear on
the multi-brand side, as there is confusion over 30 percent sourcing from SMEs.
Whether it is allowed to be done globally or only from India,” Enrst &
Young Partner Tax and Regulatory Services Prashant Khatore said.
Secondly, there is also ambiguity
on the number of cities in which these retailers can open stores which is
dependent on the veto power of the states, Khatore added.
In case of single brand retail, it
would vary from category to category, how companies approach this market.
“Since the 30 percent sourcing
clause also applies to single-brand retail also, there has to be more clarity,”
Khatore said.
“Looking into the current
situation, I do not think there would be immediate rush to open stores here.
Possibly people (foreign retailers) would want to wait till the government
comes out with a clear document,” he added.
As per FICCI estimates, the Indian
retail sector is currently pegged at around $600 billion, with modern retail
accounting for about 5 percent.
0 comments:
Post a Comment