British grocery major Tesco has sought clarification from India on conditions imposed in the new Foreign Direct Investment policy for retail. The Government promised the retailer “all help’’ to sort out concerns and set up operations.
At a meeting in Davos on Thursday, Commerce and Industry Minister Anand Sharma assured Tesco chairman Richard Broadbent that the Government would provide all the hand-holding needed for foreign companies to set up operations, according to an official release. The Minister said the company should list out the problem areas.
Consultation help
“The Minister offered all help if Tesco decides to send a team to the Department for Industrial Policy and Promotion for consultation,” the release added.
The British retailer, which mainly sells groceries including processed foods, set up an Indian subsidiary to source fresh and processed foods for its global stores last year. It now wants to set up retail outlets in the country.
A number of conditions imposed on foreign investors, including domestic sourcing norms and the kind of products allowed for sale, have created some confusion among investors.
Positive signal
“The clearance given by the FIPB to Swedish furniture retailer IKEA to set up its stores in the country has sent a positive signal to other retailers that we are serious about opening up the sector and sorting out concerns,” a government official told Business Line .
India recently opened the retail sector to foreign investors, allowing 50 per cent FDI in multi-brand retail and 100 per cent FDI in single-brand retail.
In Davos, Anand Sharma also interacted with US multi-brand retail giant Walmart’s CEO Doug McMillon, who said his company was studying the policy before announcing its plans. Sharma assured Walmart that the FDI policy was irreversible.
The Minister met British alcoholic beverages major Diageo’s CEO Paul S. Walsh, who said the company had plans of selling Indian spirits overseas. Diageo bought a 26 per cent stake in Vijay Mallya-owned United Spirits last year. Walsh termed India a ‘fantastic market’ and said the experience with India has been ‘great’.