Indian multi-brand retail FDI back on the cards

- Government minister confident of consensus on multi-brand retail FDI

 

- Move predicted by analysts earlier in PPW issue #1, 2012

 

India’s minister of commerce, industry and textiles Anand Sharma has said that the country’s government will reach a consensus on allowing foreign investment in multi-brand retail ‘very soon’.

 

Speaking as he led a high-level business delegation to Belgium this month for the Global India Business Meeting, Sharma delivered the keynote address assuring investors a ‘welcoming investment climate in India’

 

He shared the steps taken by the country’s government for liberalizing the foreign investment regime, where the policy for 100 percent FDI in single-brand retail has already been rolled out and several global companies have already firmed up investment plans.

 

Sharma said this will go further, and expressed confidence that the Indian government will be able to evolve a consensus on allowing foreign investment in multi-brand retail ‘very soon’.

 

Opening up India’s retail sector to investment by foreign companies in multi-brand stores has many potential implications for the country’s package printing market.

 

Full retail FDI in multi-brand stores had to be shelved due to strong opposition at the end of last year, but analysts told Package Print Worldwide in January that it would happen regardless of opposition.

 

Benjamin Punchard and Lamine Lahouasnia, both from market research and analyst firm Euromonitor International, said the Indian retail market is evolving and moving towards a supermarket/hypermarket model.

 

‘The Indian retail landscape is changing at pace,’ said Punchard, head of packaging research at Euromonitor, while Lahouasnia, a retailing analyst at the firm, said: ‘Foreign entrants would quicken the move towards hypermarkets, but it will occur regardless.’

 

Lahouasnia notes many large foreign retailers, such as Walmart and Tesco, are already operating in India through wholesale arrangements, and that allowing them a direct route to the market would benefit both consumers and India’s economy, especially given the requirements to invest and support local suppliers.

 

‘They can provide expertise and investment in the back end, which is essential for the development of this format. They would have had to invest US$1 million into the Indian market, with 50 percent going into things like cold storage, shipping and supply.’

 

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