Domestic retail giants oppose FDI

By agencies   |   Friday, 15 July 2005, 19:30 IST
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KOLKATA: Indian retail companies are opposed to the idea of allowing foreign direct investment in the sector, saying real estate developers were the principal interest groups as they were eyeing huge funds from overseas. The Indian retailers are of the opinion that the government should wait for at least three years to give time for the sector to stabilize. The organized retailers of the country were contemplating to plead their case before the government in this regard. A study suggested that unilateral liberalization should precede multilateral commitments in retail as India has received requests from major trading partners in the WTO to allow FDI and this would increase India's bargaining power in the WTO. "FDI in retail can be used to gain more access for Business Process Outsourcing and software sectors in developed markets at the WTO," says study. The study, highlights that retailing in other countries had increased the speed of development of modern formats, reduced capital constraints of domestic retailers, led to inflow of improved productivity, efficiency and global competitiveness of retail sector. The study pointed that since foreign retailers are allowed to enter the market through other routes and argued that the existing ban on FDI had not acted as an entry restriction.