In­dia eyes for­eign re­tail­ers for ‘made-in-In­dia’ push?

New Straits Times - - Business -

MUM­BAI: Prime Min­is­ter Naren­dra Modi’s govern­ment is con­sid­er­ing eas­ing rules for for­eign re­tail­ers if they agree to sell more lo­cally pro­duced goods, ac­cord­ing to an of­fi­cial with knowl­edge of the mat­ter.

Global com­pa­nies with a per­mit to sell lo­cal food items — Ama­zon.com Inc has ap­plied for a li­cence — may also be al­lowed to mar­ket “made-in-In­dia” non­food prod­ucts such as tooth­paste and tow­els worth about 25 per cent of to­tal sales, said the of­fi­cial.

In­dia may also al­low more for­eign di­rect in­vest­ment in multi­brand re­tail if com­pa­nies such as Wal-Mart Stores Inc and Car­refour SA agree to stock only lo­cal prod­ucts.

While In­dia al­ready of­fers 100 per cent for­eign own­er­ship in food and 51 per cent in multi­brand re­tail, there are few tak­ers due to strict rules in­clud­ing those that re­quire com­pa­nies to put half their in­vest­ment into ware­houses and other back-end in­fra­struc­ture.

The pro­pos­als can also help Modi’s flag­ship “Make-in-In­dia” cam­paign to boost lo­cal man­u­fac­tur­ing. While In­dia at­tracted US$324 bil­lion (RM1.4 tril­lion) for­eign di­rect in­vest­ment from 2000 through the end of last year, the big­gest share of US$58 bil­lion has gone to ser­vices and only about US$14 bil­lion has come into trad­ing.

About 44 per cent of In­dia’s US$620 bil­lion re­tail mar­ket com­prises food and gro­cery items, said Arvind Sing­hal, chair­man at con­sul­tancy firm Technopak Ad­vi­sors Pvt.

While the sec­tor has been grow­ing by 12 per cent each year, for­eign com­pa­nies are stay­ing away be­cause the govern­ment’s poli­cies are too re­stric­tive or con­fus­ing, he said. Bloomberg

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