Even as top organised retailers in India are preparing to see the new FDI policy norms come into play, foreign direct investment (FDI) in retail became the burning topic among retailers who gathered at the Indian Retail Forum 2011, Mumbai.
The likes of the Future Group, Reliance Retail, Birla Group’s More, and others discussed the areas where modern retail, which currently accounts for less than 8% of total retail in India, needs foreign investments to spur further progress.
"FDI is must for expansion. Even then Goods and Tax Services (GST) will be a much bigger game changer than the FDI. Currently retailers need funds and technology to improve logistics and back end systems," said Kishore Biyani, founder and group CEO, Future Group.
Retailers across the board claimed the foreign investment will be directed to improve backend support infrastructure and systems. For consumers this means better quality, pricing, choice, availability and service.
"There is an opportunity amidst chaos. Rising interest rates may hurt the economy while taming inflation for a while but India is a consumption story and that will drive growth of the modern retail," said Bijou Kurien, president and CEO, Lifestyle, Reliance Retail.
Private consumption in India is growing at about 20% which is about 4% over and above GDP growth and the inflation rate. While Indian consumers are expected to spend R55 trillion this fiscal, total retail would be over R25 trillion growing at over 15% and the share of modern retail would be over R2.1 trillion growing at over 30%.
"FDI in retail will bring down prices because of competition and variety," said Rajiv Kumar, secretary general, FICCI.