Govt should allow FDI in multi-brand through PPP: Assocham

According to an Assocham study, fresh investment in the country's organised retail sector will generate 10 million new jobs, with about 5-6 million jobs in logistics alone

Government should allow FDI in multi-brand retail through public-private partnership (PPP) with adequate safeguards to protect domestic stakeholders, industry body Assocham said today.

"Entry of foreign players in retail sector must be gradual and with social safeguards so that the farmers, consumers and small retailers are resilient to any potential adverse situation.

"The government should try to ensure that foreign and Indian players are at equal footing, so that domestic players (especially traditional retailers) are not on the back foot," the chamber pointed out.

According to an Assocham study, fresh investment in the country's organised retail sector will generate 10 million new jobs, and about 5-6 million jobs in logistics alone.

Assocham Secretary General D S Rawat said there should be modernisation of wet markets (selling fresh meat and produce) through PPPs, along with measures like facilitating cash-and-carry outlets for sale to unorganised retail and procurement from farmers and encouraging co-operatives and associations of unorganised retailers for direct procurement from suppliers and farmers.

Other measures include simplifying the licensing and permit regime for organised retail and moving towards a nation-wide uniform licensing regime to facilitate modern retail and strengthening the Competition Commission's role for enforcing rules against collusion and predatory pricing.

FDI in multi-brand retail will transform the retail landscape in a significant way. FDI would not only be fruitful for the economy as a whole but will also integrate our retail sector with the global retail market, the chamber said.

"It is important to allow the entry of FDI into this sector in a properly regulated fashion. We must guard against the risk of these new corporations becoming monopolistic and charging high price.

"FDI in retail may also help bring in technical knowhow to set up efficient supply chains which could act as models of development," according to Assocham.

Analysts estimate that the retail market in India, currently worth $500 billion (organised and unorganised) will grow to $1.3 trillion by 2020.

Organised retail is expected to comprise 20-25% of total retail by 2020 (from 5-6% at present).