Major retail chains such as Future Group, Spencer’s Retail, Titan Industries, Shopper’s Stop, TRRAIN and Hyper Market, among others, have demanded that the Centre should allow 25% FDI in retail across all channels to start with and gradually increase the cap as they have done in financial and other sectors. Kumar Rajagopalan, chief executive officer, Retailers Association of India (RAI), representing all major retail chains across the country, told FE that retail should be looked at as a total industry rather than considering each segment as an individual channel.
The Centre is considering allowing FDI in e-commerce only but, according to the RAI, this approach is not correct since it would spoil the level-playing field across various channels in the retail sector.
“The Centre has not been serious about defining retail or about creating a national policy for retail. It has been busy splitting retail into various channels… The FDI policy was created, it was split into single-brand and multi-brand retail. Then the government stated that it did not want FDI because small kiranas would lose business, but it subsequently created a rule to allow FDI in food. Now, they are saying they would allow FDI in e-commerce. All these are channels it has not seen in an overall perspective,” Rajagopalan told FE, adding that the RAI has been demanding a national policy on retail for the last eight years, but the Centre has been telling it to approach consumer affairs departments of individual states since it’s a state subject.
Maharashtra, Andhra Pradesh and Karnataka have recognised retail as an important industry and have created policies under the aegis of the industry department. Haryana also has a policy. UP and Rajasthan have also started working on policies, but the Centre woke up late, Rajagopalan said.
He said the government neither has any record of e-commerce entities operating in the country nor are there any traces of taxation on items sold on the numerous e-commerce platforms.