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ASSOCHAM for FDI in multi-brand retail via PPP mode
Oct '15
The Associated Chambers of Commerce & Industry of India (Assocham) has reiterated that foreign domestic investment (FDI) be allowed in retail industry and wet market be modernized through public-private partnership (PPP) with adequate safeguard so that these new corporations do not become monopolistic and charge high price.

A joint study by Assocham and Standard Chartered Research said allowing opening of 100 per cent FDI in retail would have led to the creation of such farm infrastructure so that FDI in general could supplement domestic efforts significantly.

Assocham Secretary General DS Rawat said for the better performance of FDI in retail industry there should be modernization of wet markets through public-private partnerships. Along with this facilitating cash-and-carry outlets, for sale to unorganized retail and procurement from farmers, encouraging co-operatives and associations of unorganized retailers for direct procurement from suppliers and farmers.

He also said there is a need for simplification of the licensing and permit regime for organized retail trade and move towards a nationwide uniform licensing regime in the states to facilitate modern retail and strengthening the Competition Commission's role for enforcing rules against collusion and predatory pricing.

FDI in multi brand retail will transform the retail landscape in a significant way. Standard Chartered Research said "The world has entered in its third super cycle characterized by Industrialization, Urbanization and International trade". FDI would not only prove to be fruitful for the economy as a whole but will also integrate our retail with the global retail market, Assocham pointed out. In the Chinese market, deployment of 100 per cent FDI was done in 2004, and today its retail sector is the second largest (in value) in the world.

"It is important to allow the entry of FDI into this sector in a properly regulated fashion. We must guard against the risk of these new corporations becoming monopolistic and charging high price. FDI in retail may also help bring in technical knowhow to set up efficient supply chains which could act as models of development."

In a true potential scenario, opening up of FDI can increase organized retail market size to $260 billion by 2020. FDI in multi-brand retail will give a boost to the organized retail sector, which positively impacts several stakeholders, including producers, workers, employees, consumers, the government, and, hence, the overall economy, the study said. (SH)

Fibre2Fashion News Desk – India

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