Indian industry gives thumbs up to FDI in multi-brand retail

The passing of the FDI in multi brand retail bill in both the houses of Parliament might have disappointed the opposition front, but the Indian industry is overjoyed and has seen the move would help the economy strengthen further.  

Referring the opening up of FDI in multi-brand retail as confidence booster for the industry, Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield said, “One step away from being India’s most radical step in the development of the retail industry, the acceptance of 51% FDI in multi-brand retail by the Lok Sabha is a major morale booster. It reflects the government’s commitment towards the retail industry. The bill, when implemented, will help the retail industry take a quantum leap towards the next phase of growth and development. More organization in the industry will mean better structuring and fairer compensation to all stakeholders. The passing of the bill will also set up India’s image internationally, as a safe and secure retail destination for global brands to enter and expand.”

 According to Santhosh Kumar, CEO (operations), Jones Lang LaSalle India, a real estate research firm, the FDI policy will immensely help the Indian real estate sector, which has been passing through one of the worst periods in the recent times. 

“The real estate retail industry will benefit immensely because of the increase in demand and investor confidence. We can also expect an increase in transparency in retail real estate, on the similar lines of commercial real estate. Additionally, the country will significantly flourish in terms of quality standards and consumer expectations, since the inflow of FDI into retail is bound to pull up the quality standards and cost-competitiveness of Indian producers in all the segments,” Santhosh Kumar said.

Real estate firms, which were reeling under the impact of the economic slowdown, will see a revival in demand following the FDI approval and are likely to bag deals from foreign retailers.  Companies such as Unitech, DLF, Oberoi Realty and Sobha Developers will be the biggest gainers, industry insiders opined.

Reacting to the opening up of the multi-brand retail sector to FDI,  R V Kanoria, President, FICCI said that, “We compliment the industry ministry for spearheading this policy decision. This reflects the resolve of the government to usher in a retail revolution in the country and also signal to the investor community that India is committed to furthering reforms. There are several benefits that would flow from this decision. We will see infusion of new technology across the agriculture value chain as well improvement in the back end infrastructure. There will be a multiplier effect in terms of employment generation and domestic manufacturers will benefit as they integrate with the supply chains of global retail majors. Consumers will have a wider choice and get better deals.”

“Within the next 12-24 months, international retailers will accelerate their entry strategy. As a result, developers involved in shopping centre development, will also get a tremendous boost and we will witness serious players expanding in this space. Over the medium to long term, the retail sector, real estate industry and the end-consumers will benefit from the move and the economy on the whole will gain momentum, depth and size,” Sanjay further added.