‘India can create many Walmarts of its own’

NEW DELHI: Ruling out any increase the foreign direct investment (FDI) limit in multi-brand retail, commerce and industry minister Nirmala Sitharaman on Wednesday

NEW DELHI: Ruling out any increase the foreign direct investment (FDI) limit in multi-brand retail, commerce and industry minister Nirmala Sitharaman on Wednesday said “India can create several Walmarts of its own”.

HT Image

The government currently permits 51% FDI in multi-brand retail. The Centre has so far resisted raising this limit.

Sitharaman defended the government’s stance saying that small traders are not ready to face competition from established foreign companies. We welcome anybody...but if some way this dialogue is moving towards, why not (FDI in) multi-brand retail in India? My answer is, ‘not yet’,” Sitharaman said at The Economist India Summit 2016.

Giving the rationale behind her argument, Sitharaman said the challenges faced by India include last-mile connectivity, adequate infrastructure and financial inclusion of segments, including farmers and small traders. However, the Centre is trying to bridge the gaps, she added.

“If only that happens, and if they (farmers and small traders) are adequately empowered to tackle the market themselves... But today we are trying to bridge those gaps. We are still not ready to have them and face a competition where there would not be a level-playing field.”

Replying to a question on why there are no big supermarkets in India, Sitharaman said: “Our supermarkets are friendlier than the faceless supermarkets I have been in the West.”

The government is taking steps to improve the ease of doing business, she added. “There was a long list of archaic laws...over 1,200 laws have been removed just unceremoniously and taken out of the system because you do not need them.”

On India’s Free Trade Agreements (FTAs) with different countries, Sitharaman said the government is reviewing some of them following concerns raised by the industry. “Our exporters have not had the opportunity to fully exploit the FTAs to their favour... We are reviewing the FTAs, along with the industry sectors.”