Kochi: The Kerala State Council of Confederation of Indian Industry (CII) has welcomed the Government’s decision to allow 51 per cent FDI in multi brand retail and 100 per cent in single brand formats in India. CII is of the view that FDI in retail will greatly boost organized retail in India and drive inclusive growth.
In a statement, Jose Dominic, Chairman, CII Kerala, said that the biggest beneficiary of FDI in retail would be the Micro, Small & Medium Enterprises (MSMEs) and consumers at large. The provision in the Bill for 30% of procurement exclusive from MSMEs would encourage small businesses to expand their businesses in retailing with focus on quality and productivity.
FDI in retail will also bring along backward integration and investment in farm to fork. States like Kerala will be able to move their produce more efficiently across the country. Moreover, modern retail will offer more choice of products, better quality & lower prices, which will benefit the end consumers.
As for kiranaas and organized stores, innovation has been the hallmark of unorganized retail. Unorganised retail with deep sighted innovations will continue to co-exist; as in other countries, only its complexion might change.
The current size of organized retail in the country stands at close to US$ 28 billion or 6-7 percent of total retail. The total retail market is estimated to grow to US$ 1,250 billion by 2020, of which 21 % would be organized. With added capital investments from key overseas players, the sector would have the potential to significantly impact the Indian economy with more thrust on inclusive growth.
Surprisingly the reaction from CII Kerala comes at a time when the decision on FDI in retail has been put on hold by the Central Government, under pressure from the UPA allies.
Kerala Biz News