Future Group to Reliance: Who said what on FDI in multi-brand retail

New Delhi: Hailing government’s announcement to relax investment norms in multi-brand retail and raising FDI caps in several sectors, India Inc today said reforms were “much-needed” and will boost the confidence of foreign investors which will help in reviving the economy.

“These reforms were much-needed,” industry chamber CII said.

Also, this is a commentary on the commitment of the government to take reforms forward at a time when the economy is in need of many such measures, CII said.

[caption id=“attachment_1004753” align=“alignright” width=“380”]  Kishore Biyani. Reuters[/caption]

“The present situation on the Current Account Deficit front necessitates greater foreign funds flow. Therefore, we hope that we shall see FDI interests in these sectors soon, in keeping with the medium-term promise that India presents,” it said.

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The government on Thursday relaxed investment norms in multi-brand retail and raised FDI caps in several sectors while making it 100 per cent in telecom.

In multi-brand retail, the government diluted the mandatory 30 percent local sourcing norms and permitted

states to include cities with population less than 1 million for allowing multi-brand retailing.

On increasing FDI limit in telecom to 100 percent from 74 percent earlier, Global Consultancy Giant PwC said 100 percent FDI will finally allow foreign telecom players to own and fund the Indian telecom companies without having to be restricted by the Indian partners funding capacity.

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“This will allow several Indian telecom companies to get the much-needed funds from overseas without having to manage their operations by surviving on expensive local debt. The telecom sector as a whole will benefit from this move,” PwC Executive Director (Tax and Regulatory Services) Goldie Dhama said.

Retailers welcomed government’s move to ease FDI norms in multi-brand retail and said now it is up to the foreign chains to foray into the country’s retail sector.

“Government has taken lot of bold steps in order to provide comfort and confidence to foreign retailers to come to the country. Now the ball is in the foreign player’s court to enter into the Indian market,” Reliance Retail President & Chief Executive (Lifestyle) Bijou Kurien told PTI.

Expressing similar sentiments, Future Group CEO Kishore Biyani said with the easing of FDI norms and clarity over definition of “control”, domestic companies can start engaging with overseas companies for partnerships.“The clarification given by the government on the ‘control’ definition that one can invest in the downstream companies provided that the management is Indian will allow retailers like us, Future Group, to see some transactions,” he said.

Since the government has come out with policy based on the consultations and feedback from the industry, Biyani said more foreign retailers would make an entry into India.

“We expect more FDI to come in the retail sector,” he said.

Retailers Association of India CEO Kumar Rajagopalan said apart from these steps, the government now needs to take more proactive steps in inviting foreign retailers in India. “Policy change is positive step and the government is sending signals that they want to help foreign retailers. The government should start inviting foreign players to set up their business in India,” he said.

Agencies