Organised retailers and industry bodies on Friday welcomed recommendations of the Committee of Secretaries to allow up to 51 per cent
FDI in multi-brand retail, but remained cagey about its impact on kirana shops.
"It is a welcome move and I think step by step we are moving closer to opening the multi-brand retail in India to FDI. This will invite a lot of interest from retailers world over," said Kishore Biyani CEO Future Group..
He said the company may look at having strategic tie-ups with international retailers in home, electronics and sports segments.
The Committee of Secretaries (CoS) is understood to have suggested opening up of multi-brand retail sector to foreign investments with a cap of 51 per cent and a minimum investment of $100 million by overseas players.
Commenting on the development Rei Agro Managing Director Sundip Jhunjhunwala said, "This issue has been pending for a long time. The latest decision should expedite the process of the relaxation of retail FDI norms. FDI will help in strengthening efficiencies in the supply chain."
Rei Agro operates food and grocery retail chain under '6Ten' brand.
US-based retailer Wal-Mart Stores Inc that currently operates wholesale stores through a joint venture with India's Bharti Enterprises did not offer immediate comments.
"We have not yet seen a government notification, so will not be able to comment. We look forward to it," a Wal-Mart India spokesperson said.
Reacting to the development, Retailers Association of India CEO Kumar Rajagopalan said: "It is a welcome step. However, we need to get into finer details. We have to understand if there are any riders and what will be the repercussions of the same."
As per the latest recommendations of the CoS, overseas mega retail chains will have to pump in at least half of their investment in the back end supply chain. The politically sensitive issue will soon be taken to the Cabinet.
Industry bodies, including CII and Assocham have also welcomed the move.
"We can begin with 51 per cent and gradually open up the sector. It will help in building up a strong retail link, will help trade and supply chain," CII DG Chandrajit Banerjee said.
He added that one does not see a threat or a strong impact on mom and pop shops as people will continue to go there, and Kirana shops and these stores can co-exist.
Special 
