New Delhi: According to CII, 51 % FDI Multi brand retail is the next logical step to the 100 % FDI in Single Brand Retail, that will significantly impact the growth and development of the entire supply chain across the country, dominated by the SMEs.
"India's growing retail boom is a success story. 51% FDI in multi-brand retail and its early implementation would give a major boost to the all round growth of organized retail in the country having substantial positive impact on the growth of SMEs" says Mr Deep Kapuria, Chairman, CII National MSME Council. He added that FDI can help*SMEs* supply in large volumes, enhance quality and become a vendor to international players and increase the quality of products and become cost competitive in global arena. Traditional trade will continue to have its own place and should not decline. Even in the last 3 years when modern retail has grown 24%, unorganized retail has continued to grow, albeit at a slower rate of 10% to 12%.
According to the Chairman, CII National MSME Council, the government's decision of mandatory sourcing of a minimum of 20% from Indian micro and small industry will help SMEs to achieve higher growth in sales, size of the industry, capacity addition, increased contracts/ orders, qualitative improvements and branding of the products, technology upgradation, employment etc
In the current globalised scenario, overseas companies have been strong participants in the India growth story. He stated that most Fortune 500 companies have established themselves in India and have brought new ways of doing business that have had strong demonstration impact on local companies. Foreign companies are leveraging India's human talents in areas such as innovation, research and development, design, etc. apart from traditional manufacturing industries. Their partnership has assisted in creating many new jobs across sectors such as automotives, IT, pharma, and others. This would grow manifold with the advent of Foreign investment in retail.
It must be noted that as countries develop, the share of organized retail vis-à-vis the total retail business in the country greatly increases. In fact, organized retail share in countries of comparative development such as China andMalaysia is much higher. For instance, in China, the organized retail is estimated at 20 per cent of the total retail sales, whereas in India, it stands at a miniscule 4 per cent.
Mr Deep Kapuria, Chairman, CII National MSME Council said that this would greatly improve investment sentiment in the country. "At a time when declining investments have led to slower GDP growth, the entry of foreign funds in Retail would go a long way in boosting confidence," he said in a statement calling for permitting FDI in retail to go ahead.
Earlier this year, a CII Survey on the Impact of FDI in retail on SME undertaken by the Confederation of Indian Industry (CII) confirmed that SME industry, by and large, supports 100 % FDI in single brand retail and expects earlier and speedier implementation of 51% FDI in multi-brand retail and notification to that effect in consideration of the overall benefits for industry and business.