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Narendra Modi, Bharatiya Janata Party's prime ministerial candidate, told small traders at a rally they have to accept the presence of large retail chains instead of “running away” from the challenges posed by them.
Traders are traditionally considered to be the 'backbone' of the Bharatiya Janata Party''s 'vote bank'.
The Gujarat chief minister Narendra Modi's comment is the first clear statement in favour of big retail and e-commerce from the party that has publicly opposed foreign direct investment (FDI), especially in multi-brand retail.
“There is no need to fear global challenges, try to convert the situation into an opportunity. Make the most of this situation. We are a powerful nation and have taken a lead in information technology. This is the age of online marketing, accept modern science and make use of it,” Modi said.
Modi surprised small traders with his inaugural speech at the Traders National Convention as they have expressed fears of being swamped by organised retail and had expected Modi to highlight those concerns.
While Modi made no direct mention of FDI in any of his three speeches in Delhi Thursday, he said his party supports the roll-out of a national Goods and Services tax, a major demand from industry for the next Central government.
Instead, he said small traders must learn to build brands and go online, creating virtual malls to take on large and multinational retailers. “Customers from even small towns are now going for branded stuff. They are going to malls to buy them. Small traders can build a virtual mall by getting into agreements with brands. You can have a virtual mall in small shops at the click of a button,” he said.
Just weeks ago, Rajasthan’s BJP government became the second state after Delhi to roll back the permission given to foreign direct investment of up to 50 per cent in multi-brand retail. Other BJP ruled states have not permitted such FDI and analysts said Modi’s views could force a rethink.
Global retailers such as Walmart, Tesco and Carrefour who had shown interest in India have since gone slow on their plans while even single-brand retailers such as Ikea have decided to pause despite getting all clearances.
Modi’s statements were lapped by big retailers.
“This looks like a strategic direction which is being set ahead of the elections and it’s a very welcome one. These comments and clarity will help everyone in the industry and foreign players to take