Ever since the Union Cabinet gave its nod on increasing the FDI limit in multi-brand retail to 51 per cent and mono brand retail to 100 per cent last week, it has triggered a heated debate both among political and industry bigwigs. In a rare show of unity Opposition parties are to move an adjournment motion in both houses of Parliament on why the government's decision on allowing FDI in retail should be revoked. Meanwhile, the Reserve Bank of India has welcomed it saying if implemented properly it will cool down inflation which has been a major cause of concern due to its double-digit mark since December, 2010. But
industry experts say retailers would take at least 12-18 months to actually enter India after the latest decision. And as far as the existing global players who are already in India are concerned, they may take up to a year to start multi-brand operations after re-negotiating with their Indian partners. The aggressive activities may not commence even in 2012 from the retail perspective due to the low economic conditions globally, so the year 2013 would see global players engaging in a tug of war to capture the retail pie in India. The issue was pending for a long time and the government did not act on it earlier since there has been resistance from the opposition and other political parties. While the Left, BJP and UPA constituents like Trinamool Congress, DMK are vehemently opposing it the Congress itself is facing criticism from within. Corporate Affairs minister Veerappa Moily said “It (FDI in multi-brand retail) will help to tame inflation and (promote) growth rate. A good, systematic supply chain will help in bringing down inflation and help farmers." Moreover, retail is a state subject and many state governments may not allow global players to open in their states. Reports suggest nearly half of the 53 cities in India may slam their doors on global chains. According to the 2011 data on the Census of India website, there are 46 cities that had a population of 10 lakh of which 25 are unlikely to allow the likes of Wal-Mart, Carrefour and Tesco to open stores since the political leadership in these states have gone on the offensive against the government's move. This inspite of the fact that on a long-term basis, opening up of FDI in retail is definitely seen as a positive move to tackle inflation as well as the Indian rupee as global retailers look to set up shop in India. Read Full: FDI in retail: Bold step, but a long way to go… - Fashion - news - Fashion News India, jobs, network, apparel, business
