IndiaRetailBiz

While, The Economic Survey (2007-08) released on Thursday by P. Chidambaram, Union Minister of Finance, among others, has recommended allowing 100% foreign equity in specialised retail chains like luxury brands, consumer durables and semi durables, it is doubtful that the government would be able to take any concrete action on the proposal, given the current power structure in Delhi, supported as it is by the left combine.

This has, however, not dettered the large retailers in the country to welcome the recommendation.

According to a PTI news report, Kishore Biyani, Future Group Chairman, which among others operates Pantaloon, Big Bazaar, Food Bazaar, and Home Town retail chains said; ”I believe it is a very good and calibrated approach.” “The move could benefit the domestic companies as “their business has become viable.” Earlier, Biyani was opposed to entry of large foreign retail chains in the country.

“Also the proposal to allow 100% FDI in specialised retail chains such as consumer durables is a good one as it has been waiting for a long time,” added Biyani. In his opinion, there was a need to create demand by investing more.

“Let the FDI come as it will help local firms fetch better valuation and continue expanding,” said R C Agarwal, Chairman and Managing Director, Vishal Retail.

“Allowing FDI would not harm the domestic players as they already have a strong presence in the market and the advantage of local knowledge over the foreign players,” he added.

While, welcoming the suggestion, Ajit Joshi, CEO and Managing Director, Infiniti Retail (Tata group- Croma), felt that ”As a country we are thinking in the right direction.”

“Even if the government takes a step by step approach in allowing FDI, it will encourage good global brands to come into India while making the domestic brands improve their quality.” said Joshi.