Opposing FDI in Retail (51%) !!!

Opposing the suggestion of Committee of Secretaries to allow 51 per cent FDI in multi-brand retail, the Confederation of All India Traders today said the move will adversely affect “crores” of small shopkeepers.

“CAIT will hold a protest dharna at nearly 100 paces in different states of the country on July 26,” the traders association said in a statement.

The Committee of Secretaries (CoS) in a meeting yesterday agreed to allow foreign investment in the politically-sensitive sector. However, the proposal requires cabinet approval.

“(the move) will adversely affect crores of shopkeepers and also badly hit people who are dependent upon retail trade for their livelihood,” CAIT National President B C Bhartia said.

The Association alleged that the CoS recommendations came after strong lobbying by the global retailers and domestic corporate houses.

FDI on the way

India is trying to build a consensus on liberalising foreign direct investment (FDI) in retail and defence, finance minister Pranab Mukherjee today told a gathering of business leaders and policy makers in Washington.

“Discussions are under way to build a consensus on further liberalisation of the FDI policy in retail and defence,” Mukherjee said.

Differences exist within the Indian government on the appropriate policies for foreign direct investments in the two sectors. The commerce ministry has proposed majority FDI in defence and retail, but the defence ministry wants a maximum of 49 per cent FDI in its field. Some other ministries are opposed to the freeing up of retail and have asked foreigners to invest heavily in cold chains and retail logistics.

Washington is keenly awaiting New Delhi’s moves on retail. The Indian government allows 51 per cent FDI in single-brand retail and 100 per cent in wholesale cash-and-carry. However, multi-brand retailers such as Walmart and Tesco are barred. 

Power of Private Labels (Part 1)

   Pantaloon Retail, part of the Kishore Biyani-promoted Future group, has set its eyes on enhancing the basket of private label products sold at Big Bazaar, the hypermarket format from the retail major.

“We already have a range of private label products at our hypermarkets in apparel, food and electronics. At present, this segment contributes about 12-14 per cent to our sales. We are planning to increase this to 25 per cent in the next two years,” Mr Rohit Malhotra, Head (Operations – South Zone) of Pantaloon Retail, told Business Line.

“We have crossed the critical mass of 45-50 a few months ago, opening up the opportunity in private labels. This number supports a certain amount of manufacturing, ensuring cost competitiveness,” he said.

The Big Bazaar network currently has 70 stores across major cities, including 22 in the South.

The portfolio of products in food, electronics, apparel and cosmetics would be expanded. The company, however, would take the outsourcing route instead of having its manufacturing lines. “A big chunk of private label products would come from outsourcing,” he said.