Kishore Biyani, chairman of Future Group, the country’s largest retailer by size, will partner with foreign investors in certain selected formats and not across-the-board. Biyani told Business Standard that local players, such as his retail chain, which have scale, will continue to grow despite international competition.
“We have different formats from lifestyle, hypermarkets, home furnishings, electronics — just to name a few. Yes, we will bring in foreign investors in some of them. But if you ask me whether we will bring FDI in all of them, the answer is no,” he said. It was widely believed that Biyani, a pioneer and trendsetter in Indian retail, is in talks with French retail giant Carrefour for a joint venture partnership.
POLITICAL OUTCRY WILL PETER OUT
It is clear that Biyani is not giving much weight to the political outcry which has followed the government’s move last week to allow foreign supermarket giants to enter India. He is also unworried about the threat from foreign companies eyeing India’s retail market, which Reuters put at $450 billion.
“We have 16 million square feet of space across the country and our nearest rival is only 2.5 million, which means we are at least three-and-a-half to four times bigger than our nearest rival,” said Biyani. “We have the infrastructure and the back-end. In that sense, we have a huge head start.”
He said the new rules of FDI were tough enough. “It has not been understood well. The conditions are pretty tough — 30 per cent local sourcing, 50 per cent back-end expenditure from India and the one-million city limitation. The opposition will peter out in a few weeks” he said.
Biyani, referred to as India’s mall king by Forbes, operates the Big Bazaar chain of hypermarkets through Pantaloon Retail India Ltd, his group’s listed flagship company. The group has recently struggled with debt.
He said the 50-odd cities permitted for FDI are also those with high consumption of food. Any increase in consumption will have a positive impact on agriculture and, therefore, for farmers. “Farmers will surely benefit; only a few traders may lose out,” said Biyani.
He said he was not worried over the tough stand taken by governments in states such as Tamil Nadu, Uttar Pradesh and West Bengal that have categorically stated they would not allow foreign retailers to set shop. “Even today, Kerala, for instance, does not allow big retailers to come in, but we have recourse to courts,” he said.
Biyani said with the government planning to implement the Food Safety & Standards Act, there was a need to improve the quality of food products in the country. “Foreign chains will be able to help in improving the quality of modern retail in a big way” he said.