Retail FDI is long over-due:Expert
"FDI in retail should have been done a long time ago, it is now a bit overdone. Retailing is not a critical sector and anybody should come in with a 100 per cent FDI. Let them come and give the consumer what she wants," the London Business School (LBS) Professor told PTI on the sidelines of the All-India Management Association (AIMA) summit here.
A panel led by Cabinet Secretary Ajit Kumar Seth has recommended 51 per cent FDI in multi-brand retail with certain riders, like minimum investment of USD 100 million and local sourcing. The USD 600-billion segment is dominated by mom & pop shops and organised retail penetration is only negligible.
The Government had opened the single-brand retail for FDI way back in 2006 and ever since 60 foreign players have entered the country in joint venture with local firms. "Currently, the challenge domestic retailers are facing is profitability. They are still trying to figure out what they want and at what price," Kumar added.
Domestic retail lacks expertise and could take help from the West that has been in the business for more than a century, he maintained. On current state of Indian retail industry, he said, "it is in a state of flux. It is consolidating and trying to find profitability models and some people are finding them."
Meanwhile, Pfizer Managing Director Kewal Handa said Government should implement reforms to support the industry. "Unless Government gets its act together, manage to control the inflation, boost the economy, reduce transaction cost, kickstart the second phase of reforms, this (situation may continue)," Handa said at the launch of Kumar`s book, `India Inside`.