New Delhi: The government may allow Foreign Direct Investment for specific sectors such as electronic and sports goods in retail if an expert study going into the issue foresees no impact on the neighbourhood mom and pop stores.
“We are expecting the ICRIER report on retail by the end of February. Certainly, we can be more flexible in areas of retail like electronics and sports goods. But, I want to see the whole report and make sure what I believe is correct and is backed by a report,” said Kamal Nath, Commerce and Industry Minister.
Nath said he had commissioned the Indian Council of Research in International Economic Relations (ICRIER) to come out with a study on retail to understand the impact of big retail on the small shops.
“Until I have the ICRIER report, I cannot do (open) retail. I have got to ensure these basic things. The point is that the neighbourhood store should not be hit,” he said, adding that the retail has to be seen in a totally India- specific context and not in a general sense.
“Retail in India is not like retail in Malaysia or Thailand,” he said.
However, opening sectors like electronics, sports goods, pharmacy and confectionery to FDI would not have an impact on the neighbourhood stores but would instead drive the Indian industry, Nath said.
Nath said the country’s ”prime concern is that our small retailers are not dislocated. ...I want to find a job for the sons and daughters, nephews and nieces,“ and added that FDI in specific sectors would create additional jobs.
He said said an international sports goods brand entering India would not be competing with a kirana store, since that is a different type of retail.
Barring defence equipment, retail and the financial sector, FDI norms for all other key sectors have been liberalised, he said.
The government liberalised on January 30 FDI norms in areas such as civil aviation, petroleum refining, credit information companies, industrial parks and commodity exchanges. However, retail was kept out of the FDI policy review since there were concerns that opening the sector would adversely impact the small retailers across the country.