Govt readies 3-Pt plan for retail FDI

NEW DELHI: In case your are waiting to shop at Wal-Mart, Carrefour and other multi-brand retail stores in the country for your household needs such as grocery, you need to be a little patient.

The government is working on a three-pronged model for allowing FDI in retail in the multi-brand segment. The commerce ministry is looking for a model that can meet three conditions: employment, technology upgradation and increase in production capacity.

In fact, it is the first condition that is of utmost importance to the government. ���The new FDI policy being explored needs to ensure that FDI in multi-brand retail adds to employment in the country and does not displace existing businessmen,��� a senior government official told ET.

���As far as increasing the production capacity is concerned, it is a logical consequence of allowing big retail chains to operate in the country as these work on economies of scale,��� the official added. However, to play safe, the government is working on a policy model that will incorporate the condition in the FDI policy for multi-brand retail.

As far as upgradation of existing technologies is concerned, experience tells us that post-liberalisation, new technologies have made their way into the domestic market, another official in the department of industrial policy and promotion added. But the government is still looking for a model that this condition is also met.

While experts formulate the policy for FDI in multi-brand retail, private retail players will be allowed to start operation. This will give policy makers a chance to assess the impact of big retail chains on the mom-and-pop stores, or kirana shops. Already, players such as Big Bazaar and Food Bazaar have opened outlets in various cities.