Saturday, May 26, 2012: 09:30:17 PM

Retail News

Petrol price rise may see speedy decision on FDI in retail

Steps taken by the government indicate that there is a sense of urgency and decision on the much discussed issue of FDI in retail is expected soon

Even though the government’s decision to increase petrol prices by more than Rs 7 per litre has created a sense of anguish among the citizens of the country on a whole, retail players in the country are looking upon it as a move that will benefit them on the foreign direct investment (FDI) front.

The unprecedented hike of petrol prices indicates that there is a sense of urgency within the government. It is soon expected to push some of the key pending issues like FDI in multi-brand retail.
Although retailers across India expected that a final decision on FDI would come after the assembly polls in a number of states across the country, nothing really seemed to happen on that front. However, the petrol price rise is being seen as a stepping stone for bringing in necessary reforms.  
Experts speak
According to Rachna Agarwal, CEO and director of Indus League, a Bengaluru based unique brand lifestyle-marketing firm, “In the long run, FDI has to come in retail. The economy will be opening up. It is inevitable. Once it is introduced, the concept will prosper on its own.”
According to Caroline Fernandes, brand consultant and creator-facilitator of theBARCODE, a brand management firm, “International players have been wary of entering the market for a long time for the policy paralysis that exists regarding FDI in retail. If this facilitates their entry, then the move will be worth it in the long run.”
There has not been too much of activity on the FDI front for retail players across the country even though discussions were being held with chief ministers of different states and sometimes with farmer lobbies in order to work out a winning formula. The ministers have been trying to open up the retail sector in a phased manner in states where the industry has not been taking those discussions quite seriously. On the other hand, the prevailing notion across the sector is that FDI is still facing a roadblock.
However, the situation has changed rapidly and now everyone is expecting a speedy decision soon.

Sambuddha Sengupta

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