Financial Daily from THE HINDU group of publications
Thursday, Feb 23, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 23, 2006 |
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Industry & Economy
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Foreign Direct Investment Marketing - Retailing Govt cautious on opening up retail FDI — Exploring role model for multi-brand segment Our Bureau
RETAIL MANAGEMENT MEET: (From left) Dr A.K. Dua, Secretary, Department of Industrial Policy and Promotion, Mr Anil K. Agarwal, President, Assocham, Mr Sanjeev Duggal, CEO & MD, NIS Sparta Ltd, and Mr H. Mahadevan, Deputy General Secretary, AITUC, at a seminar in the Capital on Wednesday. — Ramesh Sharma
New Delhi , Feb. 22 THE Government is fully aware of the dichotomy associated with allowing foreign direct investment (FDI) in retail trading and would take all necessary precautions before permitting FDI in multi-brand retailing, according to Dr A.K. Dua, Secretary, Department of Industrial Policy and Promotion. Dr Dua said this here today while inaugurating a national seminar on `Shifting Paradigm in Retail Management' jointly organised by the Associated Chambers of Commerce and Industry of India and NIS Sparta. "While economic logic suggests that retail should be opened up for MNCs, empirical evidence say that wherever retail has opened up, it had its adverse impact on the local people and if the Government of India takes a policy decision for retail opening, all the apprehensions that are being expressed against MNCs entry into retail would be adequately addressed to," Dr Dua said. He said that the Government is weighing all pros and cons and exploring a role model before deciding to open up multiple brand retail business to foreigners. The retail sector would be opened up keeping in view the existing social fabric of India and the Government will ensure that the entry of global retail giants do not displace the existing employment in the retail business. He, however, pointed out that the "issue actually is that can our unorganised retail sector withstand the organised retail sector that would enjoy the economies of scale." "Whether it is large domestic companies like Reliance that has announced entry into retail or MNCs like Walmart, the effect on the small mom and pop shops could be the same. If you are to be killed, how does it make a difference whether the killer is domestic or foreign?" he questioned and added that there is no law that can prevent big cash-rich Indian corporates from entering retail business. Mr H. Mahadevan, Deputy General Secretary, AITUC, who also spoke on the occasion, said that trade unions did not oppose FDIs but cautioned that opening up of retail to MNCs would have dangerous consequences
More Stories on : Foreign Direct Investment | Retailing
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