“Almost 97 per cent of the retail business is unorganised, and nothing will be done that can lead to job loss or have an adverse impact on those involved in this sector,” was a simple statement that Union Commerce and Industry Minister Kamal Nath made while addressing the Rajya Sabha. The statement, probably for the time being or at least until the next Lok Sabha elections, has brought all FDI debates to a standstill.
Indiaretailing tried opening a discussion and called up the industry honchos to understand what the rest of the three per cent (organised retail, as per the minister) along with the realtors in the country have to say on ‘no FDI in retail’.
The decision makers of several major retail and real estate companies had one thought in common – almost all of them, on condition of anonymity, said that this is the government’s decision and has come at a time when elections are near. Quite obviously, it has much to do with the vote bank of India – and not the Reserve Bank of India – and is not considerable as a long-term policy for the country.
Quizzed about his stand on the minister’s statement Rajan Malhotra, CEO, Big Bazaar, said: “The government has done its job by making a decision. It doesn’t really affect us as we will continue to run our business well.”
Asked whether this decision has lowered the risk of competition from foreign retailers, Malhotra said, “We don’t think that foreign retailers can come and compete with the national retailers. In fact, the national retailers are potent enough to give foreigners a good run for their money.”
An official spokesperson of Carrefour said, “We do not want to comment on it as we are very close to announcing our retail partners in the country.”
RC Agarwal, CMD, Vishal Retail, one of the fastest-growing mass retailers in the country, said, “This decision doesn’t really matter to us. Even if 100 per cent FDI is allowed, we will continue to operate our business in the same way. Besides, we seriously feel that this is just a temporary move and the government will eventually allow FDI in retail.”
Lalit Kumar, chief executive officer, Ebony Gautier, said, “This decision will not help the Indian retail industry in the long run. Our local retailers will only be efficient when they face efficient competition from foreign retailers. Stopping them from entering the country will not help retail.”
– Ranjan Kaplish and Satrajit Sen