Calibrated move to open FDI in retail a good start: Mittal

A calibrated step to open FDI in multi-brand retail will be a good start to attract overseas investment in the sector, according to Bharti Group, which runs a wholesale joint venture with WalMart in India.

In an interview with PTI, Bharti Group Chief Sunil Mittal said he would not even mind if some conditions are put while relaxing the FDI norm, as long as it is being opened up.

"I think anything is fine. To start with...A calibrated approach is fine," he said when asked what percentage of FDI in multi-brand retail should be allowed. Yesterday, the government threw open a debate on opening up the retail sector to foreign investment saying it would not only help farmers earn more but also keep the price-line under check, after keeping the lid on FDI in the politically sensitive multi-brand retail business.

At present 51 per cent FDI is allowed in single brand retail but prohibited in multi brands. In the wholesale business, 100 per cent foreign investment is permitted.

Stressing that the retail sector requires improvement not only in the back-end logistics but also at the front-end, Mittal said a lot of investments are needed for it and "foreign direct investment (FDI) is a good source for it".

He said the last retail point too should be able to handle fresh produce, whether its meat or poultry or farm products without wastage, as is being done in 'subzi mandis'.

"Until we have the end-to-end possibility it won't work," Mittal said. In India, post harvest losses of farm produce, specially fruit and vegetables and other perishables have been estimated to be over Rs 1 lakh crore annually.

"I personally believe that back-end supply of the food chain right from the farm to warehouses to trucking to cold chain and bringing it up to the retail shops is absolutely essential. For that we need investment...," Mittal added.

Reacting to the government's steps towards allowing FDI in multi-brand retail, Mittal said: "I'm absolutely confident that this will be extremely good for the development of supply chain of food and farm produce in the country. No doubt about it. In two three-years time people will start seeing the result."

Bharti Group has a 50:50 joint venture with the world's largest retailer Wal-Mart in cash and carry business, which runs the 'Best Price' stores in India.