A number of UK retailers, including Next, Debenhams and Body Shop, are said to be considering an Indian foray by next year. However, pressure from the Left parties has kept the Government from opening up the retail sector.

Anil Sasi
Neha Kaushik

New Delhi, Nov. 20

THOUGH the FDI policy in the retail sector remains unclear, overseas players are bracing themselves for an entry and are firming up plans for the Indian market.

Close on the heels of the Wal-Mart Chief's visit to India earlier this year, UK-based retailer Tesco's CEO, Mr Terry Leahy, is slated to make his first visit to the country next week.

This visit gains significance, considering that Tesco Plc has cut by half its sourcing of Chinese textiles, since the European Union implemented quotas on shipments from China in June, which limited growth in imports from the country.

Tesco is looking at alternatives and is expected to increase sourcing from Indian textile firms. Mother Care UK Ltd, another retailer with a strong European presence, is also gearing up to enter the country in a franchisee tie-up with Shopper's Stop with plans to set up 40 outlets.

Gap Inc, one of the world's largest speciality retailers, is in the process of big-ticket recruitments for its India office, including personnel for global compliance finance, accounting, HR, technical services and product assessment.

Other retailers, who have in the past established a presence here, also seem to be waiting in the wings. UK's Marks & Spencer Group and Dubai-based Lifestyle International have set up shop in India through franchisee ventures, while Germany's Metro and South Africa's Shoprite Holdings have entered the wholesale arena.

A number of UK retailers, including Next, Debenhams and Body Shop, are said to be considering an Indian foray by next year. However, pressure from the Left parties has kept the Government from opening up the retail sector. In April, the Government had said that it was trying to build a consensus on the issue.

Currently, Indian retailing mostly takes place in small mom-and-pop shops and makeshift bazaars.

Organised retail makes up a mere three per cent, or Rs 28,000 crore of the overall industry, but its share is forecast to grow to 8-10 per cent in the next five years.

(This article was published in the Business Line print edition dated November 21, 2005)
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