The Hindu Business Line : `FDI in retail key to make India a leading destination'

FDI in retail is a must and would help a long way in making India a leading retail destination in the world, said industry experts at the India Retail Summit on Friday.

Ms Bala Deshpande, Director, Investment, ICICI Venture Funds Management, said that the issue is not whether FDI should be allowed, but the way the industry and Government handle it. "FDI would have a positive impact, as companies would push up scales and quality of performance. Competition is always healthy."

She said that by not allowing FDI, the Government would be cutting down an investment model. Ms Deshpande also added that even if FDI were allowed, it would take considerable time for any effects to surface. "The mom-&-pop and the large-format stores will continue to be there. Carrefour, for instance, took 15 years to break even in China. Therefore, nothing will change overnight."

Similarly, Dr Arpita Mukherjee of Indian Council for Research on International Economic Relations, also said that competition enhances productivity. "In China, where organised retail has picked up in a big way, the major growth has come from domestic retail. The fear of competition makes one proactive."

She said that in India, with the opening up of the market, small retailers have already benefited a great deal. "The supply chain has percolated, power balance is shifting from manufacturers to retailers and Indian manufacturers are developing export capabilities."

Dr Mukherjee said that the Government has to have clear policy objectives, which are palatable to the players. She said that it has to come up with employment generation programmes for the rock-bottom categories, because according to her, even if domestic retail grows there will be displacement of employment.

Giving a real estate developer's perspective, Mr Rajsingh Gehlot, Chairman, Ambience Infrastructure, said though the coming years would see as many as 350 malls in the country, India doesn't have enough brands to showcase in these malls. "If we fill these malls with mom and pop stores, how do we provide a great shopping experience," he questioned.

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