The government will announce new rules for foreign investment in retail by April 2012, paving the way for companies such as Wal-Mart Stores and Carrefour to open superstores, minister of state for trade Jyotiraditya Scindia said.
“We are much further down the process than people think,” Scindia said. “I think it is a huge opportunity” for India.
Indian law limits foreign retail investment to ownership of wholesale stores or 51% holdings in single-brand shops.
The government prohibits non-Indian companies from operating multi-brand outlets to protect local store owners in the second-fastest growing economy.
Wal-Mart and Carrefour, the world’s biggest retailers, have set up wholesale stores in India to develop their supply chains and gain a foothold in the market. The companies have made a “good start” helping farmers gain access to better technology and earn more money from the sale of their produce, Scindia said.
India is the third-most attractive retail market for global retailers among the 30 largest emerging markets, US consulting group AT Kearney said in a June report. The growing middle class, expanding economy and increasingly brand-conscious population will help push retail sales up by 35% over the next three years, the consultant said.
“There are not too many large untapped retail markets left, so foreign retailers are watching this decision closely because it is a tremendous opportunity,” said Narayanan Ramaswamy, executive director at KPMG in Chennai, who advises retail companies.
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