In an
important policy move, the Indian government gave permission for up to 51% FDI
in multi-brand retail in September 2012. The objective of this policy is to
boost the retail business through adoption of international standards and
practices.
The entry of
international products, practices and technology is expected to enhance the
efficiency of domestic retailers. The government has made it mandatory for
foreign multi-brand retailers to place at least 50% of their total investment
in back-end infrastructure, thus giving a boost to facilities such as logistics
and warehousing.
With
multi-brand retailers exploring opportunities in India, demand for retail space
is likely to rise significantly. This will induce developers to launch new
malls and, as store size requirements are significantly higher for
multinational retailers, will encourage them to build larger malls along with
sufficient mall infrastructure.
Quality will
also receive a significant boost as the malls will be constructed to meet
international standards and norms. The competitive environment is likely to
enhance the productivity and efficiency of domestic retailers; with better and more transparent
pricing, sales will improve significantly. Domestic retailers will also
leverage their portfolios by adopting many of the new retail strategies followed
by large international retailers.
The average
size of shopping malls in India has already begun to increase as developers
focus on larger spaces. The success of a mall does depend on its size as
superior grade malls are nearly double the size of average grade malls. It is
estimated that the average size of a superior grade mall is 400,000 sq ft,
whereas the normal size of average grade and poor grade malls are 190,000 sq ft
and 150,000 sq ft, respectively.
The larger
malls allow for a complete tenant mix in various formats and categories, and
can adopt modern mall management practices easily. With the introduction of FDI
in multi-brand retail, the average size of a mall is likely to increase as
foreign retailers tend to occupy large spaces. As a consequence, both total mall
supply and size are expected to increase over the medium to long term.
05/12 & 07/12/2012 are black days in the history of Indian Democracy.....it has exposed the unethical double standard stand taken by SP and BSP.....it has also exposed the unholy nexus of Congress with SP and BSP.....it further exposed that Congress, SP and BSP are afraid of contesting parliamentary election right now as all are flooded with corruption charges under trial.....it is surprising and shocking that our learned and respected PM Dr. M M Singh has blatantly thrown away the sanctity of democracy and moral values just for winning FDI motion in LH & UH of the Parliament.....I am afraid that such an action is nothing but the last nail in their COFFIN..... they will be paid back to their own coins in the next 2014 election by the people of India.....which BJP suffered in 2004.....
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