India currently allows 100 per cent FDI in cash-and-carry operation and 51 per cent in single-brand retailing. Foreign investors are barred from investing in multi-brand retail.
‘Multi-brand retail should be permitted with a cap of 49 per cent… A significant chunk of investments should be spent on back-end infrastructure, besides logistics and agro-processing,” the Consumer Affairs Ministry had said in response to the discussion paper floated by the Department of Industrial Policy and Promotion in June on allowing 100 per cent FDI in multi-brand retail.
A senior government official has said the Consumer Affairs Ministry has sought the enactment of the National Shopping Mall Regulation Act to regulate the fiscal and social aspects of the retail sector, besides allowing mom-and-pop stores to become franchises of multi-brand retailers, according to a report in the Hindu Business Line.
“This will help grow not just the business but also in setting up back-end infrastructure which is much needed for the evolution of the retail sector,” the official added.
According to an ICRIER study, commissioned by the Commerce Ministry in 2007, “the retail business, in India, is estimated to grow at 13 per cent each year from $322 billion in 2006-07 to $590 billion in 2011-12. The unorganised retail sector is expected to grow at about 10 per cent a year from $309 billion 2006-07 to $496 billion in 2011-12.”
A growth in this segment of Retail augers well for the wine industry since many of these big ticket retailers can add big wine portfolios resulting in higher volumes. State governments are increasingly allowing the supermarkets and retailers sell wine and beer. Delhi government is the last to fall in this category. Maharashtra and Karnataka already have allowed as have states like Haryana, Punjab etc. A good example of wine retail is through Indian owned Spencer’s in cities like Gurgaon. |