Sahai bats for FDI in multi-brand retail

NEW DELHI: Union minister for food processing industries Subodh Kant Sahai said on Tuesday he is optimistic of India opening up foreign direct investment ( FDI) in multi-brand retail in 2011.

“I am open to FDI in multi-brand retail as it will give boost to the Indian farming sector. The issue is very much on the agenda. We are hopeful something will come up on the same next year,” Mr Sahai said. India’s retail sector is largely closed to foreign firms and favours small mom-and-pop stores, with 51% FDI allowed only in single-brand retail.

Wal-Mart Stores Inc chief executive Mike Duke, who was also present at the occasion, said easing the rules of FDI in retail will create 3 million jobs in the next five years and help contain inflation by 50-70 basis points.

“If 100% FDI is allowed, we will be able to invest more capital, get superior technology and create an efficient supply chain in the country. More capital infusion will eventually lead to higher growth and increased job opportunities,” Mr Duke told reporters at a conference organised by industry body FICCI.

Wal-Mart has expressed satisfaction at the Indian government’s calibrated approach towards opening the multi-brand retail sector to foreign investment. “We understand the sensitivity of the issue and respect the government’s strategy. However, we are confident of the Indian government opening up multi-brand retail to FDI soon, he said.

Meanwhile, Bharti-Wal-Mart, the joint venture between Bharti Enterprises and US-based Wal-Mart Stores, said it plans to buy agriculture produce directly from 35,000 small and medium farmers in India by the end of 2015. The retail venture proposes to bring in the best farm management practices and train farmers to grow more with less water and optimum use of fertilisers and pesticides.

“We are confident that these initiatives would result in a 20% increase in the income of farmers and have a multiplier effect to benefit one million farmers and other workers associated with agriculture,” Mr Duke said.