Industry readies for retail FDI

A section of the industry is preparing to cash in on the probable opening up of the retail sector to foreign direct investment.

Consultancy firm KPMG is going ahead with its plans to conduct a series of at least five roadshows in the United States, Canada and Europe to talk about the opportunities in India's consumer markets, especially retail.

"We expect at least 80-85 companies to attend these roadshows, which are scheduled to start in October this year," said KPMG's Executive-Director and head of the consumer markets practice Deepankar Sanwalka.

Sensing a willingness on the government's part to open up retail, several top retail chains, including Walmart, Carrefour and Tesco, have held meetings with senior government officials. Walmart's Menzer, on his visit to India, had even called on Prime Minister Manmohan Singh in this regard.

But two big global retailers are believed to have said they wouldn't like to enter India unless they could own at least 51 per cent equity in the venture. The rationale is that these companies would like to operate here on a large scale, even setting up multiple outlets in one metro, and the higher the equity they can hold, the easier it will be for them to expand.

Foreign direct investment in retail has once again begun to appear imminent following Prime Minister Manmohan Singh's interview to McKinsey & Co's Rajat Gupta, expressing confidence that he would be able to get the Left parties onboard in this issue.

The Commerce Ministry in its draft cabinet proposal on the revised service offers to the WTO had mooted 100 per cent FDI in retail. This was later dropped following discontent within the Cabinet.

The government also turned down Singapore's request to open up retail during the recently concluded negotiations on a Comprehensive Economic Cooperation Agreement to be signed on Wednesday.