BJP’s FDI stand may hurt big global retailers like Tesco and Carrefour

NEW DELHI: Big retailers in the country are caught in an uneasy situation with the BJP — widely considered favourites to lead the next government — is expected to promise to scrap foreign investment in multi-brand retail in its election manifesto.

While most multinational and Indian retailers did not want to comment until the main opposition released its manifesto, industry insiders said it would be a blow to some big players if the next government reverses the policy of allowing global supermarket chains to own up to 51% stake in local retailing ventures.

While top global retailers have been looking to enter the lucrative Indian market, some homegrown supermarket chains too have been planning to tie up with multinationals for investments as well as technical expertise.

The UK’s Tesco Plc has already received the government approval for an equal joint venture with the Tata Group while France’s Carrefour SA is reportedly in talks with Bharti Enterprises for an alliance.

A Tesco spokesperson in India and a Bharti spokesman declined to comment. Mohit Kampani, chief executive at Spencer’s Retail, said a policy reversal will not impact the industry as a whole. “I don’t think it is an industry thing…it has to do with some certain retailers.

I can’t take name but it is pretty obvious what the names are. It is rather more retailers specific than industry,” he said. Kampani said Indian retailers have the ability to grow on their own without the technological and financial support of the multinational retail titans.

ET on Friday reported that even though the BJP is expected to promise an entirely pro-reforms agenda in its upcoming election manifesto, it is expected to promise to scrap FDI in multi-brand retail.

Harminder Sahni, founder of retail consultancy Wazir Advisors, said he expected BJP to come up with a fresh policy to allow FDI in retail after scrapping the existing one.