The Hindu Business Line : `Go slow' on FDI in retail sector

THE Government should wait for a few years before allowing Foreign Direct Investment in the domestic retail sector, thereby providing the industry time to mature further, Mr Kishore Biyani, Managing Director Pantaloon Retail India, said.

Commenting on the issue of FDI in the sector, Mr Biyani said that organised retail comprised just 3 per cent of total retail in the country today, adding that no other nation had opened up retail to foreign investment at this nascent stage of development.

Mr Biyani was speaking on the sidelines of the CII Marketing Summit 2005, organised by the Confederation of Indian Industry in the Capital recently.

He was of the view that organised retail should be allowed to grow indigenously to a higher level before foreign investment is permitted. "Since Indian retail is growing at over 40 per cent, foreign direct investment in retail was not urgently required, as Indian entities are growing this sector at a rapid rate. Further, the valuations of Indian retailers would be better in a few year's time," Mr Biyani said.

Speaking at the Summit, Mr Samir Modi, President, Twenty Four Seven Retail Stores, said that domestic players are well equipped to meet the demands of Indian consumers and understanding consumers was the chief advantage that domestic retailers had over their foreign counterparts.

He stated that the biggest challenge was in supply-chain management, increasing profitability and driving growth through experimenting with new formats. However, he was confident that Indian retail companies would effectively tackle these issues.

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