India’s trade minister Anand Sharma today held a ’round table conference’ with foreign companies and others to address their concerns about the country’s foreign investment (FDI) policy for the retail sector.
The meeting came after many foreign firms, such as Wal-Mart, seemed to have gone slow in firming up their plans for investing in the country.
The government had, earlier this year, opened up the retail sector to foreign companies, hoping it would bring in much needed investment in the back-end, setting up of cold chains etc.. It was also expected that the presence of large chains such as Metro and Carrefour would reduce the large fluctuations seen in the prices of food items over the last two years.
Sharma did not say whether companies promised to invest in India, after the meeting.
“The purpose of this meeting has been to interact with the multi brand retailers, potential investors, some of them have established presence in India, in the back end or setting up sourcing establishments,” he said.
“Some questions have been frequently raised, there has been speculation, and also misgivings. It was important for the government to hear where are the areas or the issues which may require some more clarity,” he added.
Five months earlier, Sharma’s office had issued a statement saying Wal-Mart is studying the conditions attached to India’s decision to open its supermarket sector to foreign investors before finalizing a decision to invest.
It said that the CEO of Wal-Mart International, Doug McMillon, told Sharma that the firm was “excited about India” but was studying the fine print about the regulations before investing. Sharma had tried to reassure McMillon that there would be no “policy reversal.” The current government’s term runs out in 2014.
According to government data, eleven states out of the total 22 have shown the green light to foreign investment in retail.
Illustrating India’s penchant for bureaucracy and hair-splitting, Swedish furniture-maker IKEA was initially not allowed to offer paid refreshments to its shoppers as its proposal was for selling furniture items. However, the government later relented, saying that it could offer ‘IKEA branded’ food items inside its ‘restaurant areas’.
IKEA plans to set up 25 retail stores across the country over the next few years.
Sharma said the objective of the policy was to encourage investments, job creation, benefit to the farmers and benefit to the consumers. “Therefore we have sufficient space to address those concerns, bring in the clarity, and an early and appropriate view will be taken so that the guidelines can accordingly be given out,” he said.