FMCG, retail sectors upbeat over poll verdict

NEW DELHI: Hard-pressed for cash, the domestic retail industry expects the UPA, which is very likely to form the next government, to boldly open up the sector for foreign investment.

Fast-moving consumer goods companies, which have a strong nexus with the retail chains, would like the government to speed up further investment in rural India. An expanding rural market played a significant role in making up the weakness in the urban area for several FMCG companies.

"The clear mandate is a positive development. The government should allow foreign players and FDI without any restriction into the retail sector and also give the retail sector the status of an industry," Vishal Retail Group President Ambheek Khemka told PTI.

At present, India does not allow FDI in multi-brand retail. FDI is allowed in single brand retail and through the cash and carry (wholesale) models.

The country has a huge retail market worth $332 billion (2007 figure) of which the organised players like Reliance Retail, Spencer's Retail, Vishal Retail, the Future Group and 'More' of the Aditya Birla Group account only for 5.8 per cent.

"We are already one of the largest employers in the economy and the sector has lot of potential. We want them (government) to lift all restrictions of entry of FDI as it could create better competition," Khemka said.