The Hindu Business Line : White paper pitches for FDI in retail

MAKING a pitch for opening up the retail sector to foreign direct investment (FDI), a white paper by Federation of Indian Chambers of Commerce and Industry (FICCI) and ICICI Property Services has said that FDI has played a key role in the rapid development of high-quality retail in several other developing countries.

The paper points out that only the small trader lobby has been vocal against allowing FDI in retail and this opposition is based on a misplaced premise that modern retail will impact the livelihood of millions of small, family-run businesses.

"However, as we have seen broad-based reforms in the retail sector, in the long run it is extremely beneficial for the entire economy. This would increase employment in retail and also improve retail spending," it said.

The paper has also stressed on the need to grant the retail sector industry status and relax the small-scale industries reservation, particularly for items of food and apparel. It has noted that for the retail sector to develop, the market for real estate must be organised by ensuring proper rent laws and increasing land supply.

Yet, another problem being faced by the sector is restricted distribution and the paper has requested the Government to allow retailers to source directly from the farmers and remove restrictions on foodgrain movement across States.

The other demands made by FICCI and ICICI Property include flexible labour laws, better enforcement of tax collection from small retailers, single-window clearance for retail chains and elimination of bureaucratic hurdles at the local and State government level.

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