)
There's no rush by global retail chains to invest here, it appears from recent developments.
Those that had waited for years to open stores here are not in a hurry to file their application, while those watching from outside are hesitant to make a move. In a telling signal, at least six major foreign retailers failed to turn up at a meeting on multi-brand policy called by Commerce and Industry Minister Anand Sharma on Thursday, it is learnt.
Also, many top international chains setting up sourcing offices in India are not planning to set up stores in the country anytime soon, they've said. Policy uncertainties even months after 51 per cent foreign investment was allowed in multi-brand retailing are keeping the international companies away, say experts.
Representatives of chains such as Walmart, Tesco and Carrefour, already operating a wholesale/cash and carry business or providing back-end support to retailers in India, attended the minister's roundtable.
However, American chains such as the The Kroger Company (groceries), Costco Wholesale, Walgreens (drug retailing) and The Home Depot (home improvement) did not come, though they were reported to be part of the invitee list. Two German supermarket chains, Schwarz and Aldi, were asked to come but preferred to stay away.
When asked, Walgreens' spokesperson Vivika Panagiotakakos said, "We don't have any record of receiving an invitation to the event." On whether the largest drug retailing chain of America was keen to enter India, the spokesperson said, "While we are positioned for international expansion with our Alliance Boots partnership and long-term relationship with AmerisourceBergen, we currently don't have specific international plans."
With its shares traded on the NYSE and Nasdaq, the $71-billion Walgreens runs 8,000 drugstores in America.
The NYSE-listed $70-bn Home Depot said the company was not in a position to attend the meeting with Sharma, "due to scheduling". On the likelihood of setting up shop in India, Meghan King, spokesperson, told Business Standard, "We never speculate on entering new retail markets and have no additional information at this time." It is believed Home Depot is not looking at India at this point.
Others, including Costco, Krogers, Schwarz and Aldi, did not reply to this newspaper's queries on their interest in the India market and their participation in the retail policy talks with the government.
Sainsbury's, the UK-based £22 billion supermarket chain, which recently got government approval to open an India sourcing office at Gurgaon, does not have a plan to set up retail stores. A spokesperson said, "We have no plans to open stores in India, as we are continuing to focus on growing our business in the UK." Apart from India, Sainsbury's has sourcing offices in China, Hong Kong and Bangladesh.
Migros, Switzerland's biggest retailing company, with annual revenue of $25.4 billion, will have a sourcing office in India. Monika Weibel, spokesperson, said: "The group is buying in Asia numerous products. For this reason, we have an office in Hong Kong, Shanghai and now we are in the process to open an office in Delhi." Migros sources textiles, rice, spices and decoration items of an estimated value of $50 million from India. While saying sourcing from India would be stepped up, Weibel said there were no plans to bring the Migros brand to India in terms of setting up stores.
Officials in the department of industrial policy and promotion said they were optimistic that setting up a sourcing office was the first step towards getting into retail stores. "They are testing the market through the sourcing base," an official said.
Years before the likes of Walmart, Metro and Carrefour decided to open cash and carry stores in India, agreed a sector representative, they had sourcing offices in the country. These are two different steps in the business, he said, but one thing could lead to the other.
Yet, the fat is that nine months after the policy was cleared by the Union cabinet, not a single FDI proposal has come to the government.
INDIA PLANS ON HOLD?
- Six major foreign retailers didn't turn up at a meeting on multi-brand policy called by Commerce and Industry Minister Anand Sharma
- Experts say policy uncertainties regarding multi-brand retailing are keeping companies away
- Walmart, Tesco and Carrefour attended the meet, while The Kroger Company, Costco Wholesale, Walgreens, The Home Depot, Schwarz and Aldi did not
- Officials in the department of industrial policy and promotion are optimistic that setting up a sourcing office is important before getting into retail stores
