Govt decision on FDI in retail sector in a few weeks

Mumbai, Sept 15 | Updated: Sep 16 2005, 07:37am hrs
The government will take decision on foreign direct investment (FDI) in the retail sector in the next few weeks, commerce secretary Ajay Dua said here on Thursday. The limit of FDI will vary from one segment to another like food and apparel among other, he said. He was speaking at the India Retail Forum 2005 organised here on Thursday.

If at all FDI is opened, it will be a highly calibrated one, Dr Dua said. We seem to be treating retailing as a homogenous segment, which is not the case. Retailing must be classified into different sections like food, apparel and jewellery and other lifestyle products since government has different ministries for each segment.

He pointed out that while India is improving its competence in manufacturing goods, we do not show the same concern about marketing efficiency.

Union minster of commerce and industry, Kamal Nath said that with increased needs and quality consciousness of the consumer, retail industry has to modernise and look at the new technological advancements in retail. If we have to reach global standards, if we have to engage with the world, then its important that we bring in the right technology, the right quality to meet the demands of the Indian consumer and most of all in the food sector, Mr Kamal Nath said.

Today India is the largest producer of fruits and vegetables in the world, but 40% of it is rotting, he lamented stating that retail is not merely keeping things on the shelf and disposing them.

We have 22 million people entering the middle class with growing aspirations and moving upwards to greater purchasing power. And it is here that retail which in India has been largely in the unorganised sector, is now taking off with greater demands of the consumer. Unless we have commensurate growth in retail we will not be able to move forward.

By 2010, Indian organised retail will be have a 9% share from the present 3% share of the total retail industry provided the private players will have to make efforts, Dr Dua said. The key factors of growth are scalability but retail formats should be experimented and then used, he cautioned.