10.6.09

Retail snippets


The government should ban foreign firms and big domestic corporates from retailing groceries, fruits and vegetables, and stop issuing licences for wholesale operations, a Parliamentary panel said.“Government should stop issuing further licences for ‘cash-and-carry’, either to the trans-national retailers or to a combination of trans-national retailers and the Indian partner, as it is mere a camouflage for doing retail trade through back door,” the report on foreign direct investment in retail said. The government does not have to accept the recommendations of the report, which was submitted to Parliament. The issue of foreign firms and domestic corporates entering retail has been controversial, and the report said the opening of FDI in retail by allowing single-brand foreign firms in India would cost jobs and diminish the role of small businesses. Foreign multi-brand retailers are now limited to wholesale or licence and franchise operations in India, and there are no restrictions on domestic players. The panel also asked the government to set up a regulatory authority to look into the problems of small traders and to monitor larger players for anti-competitive behaviour and abuse of dominance. India’s fragmented and tightly-controlled $400-billion retail industry is forecast to nearly double in size by 2015, but less than 5 per cent of the market is in the hands of modern retailers.
Apart from Wal-Mart, global names like Metro, Tesco and Marks and Spencer are already present in India, and Carrefour is scouting for a partner. Reliance Industries has retail operations, including a supermarket chain, which have run into opposition in parts of the country.
The panel also argued against the entry of foreign investors into book publishing, saying their pricing would affect the domestic industry and published material could prove detrimental to national interest.

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