The Indian Government is considering allowing foreign direct investment in multi-brand retail in India. Is it too late? Global retailers like Walmart and Tesco have been looking at the Indian supermarket sector for a long time wanting to open up their stores in a country with over a billion people growing at over 7% per annum. However, have the e-commerce retailers stolen a significant march on the bricks & mortar retailers? Amazon India, Snapdeal and Flipkart have built substantial e-commerce retail businesses in India. Will the Walmarts and Tescos want to invest into the India B2C market and build a store portfolio in India where real estate is expensive and travelling to and from supermarkets will be time consuming for most customers in India? Add the Indian Government's requirement that the multi-brand retailers must make all their products in India if they wish to sell via the multi-brand retail format, will the global supermarket operators want to make the substantial investment in India that will be required? Maybe not.
In a bold reform move, the government is considering a major overhaul of the foreign direct investment policy that could end up freeing the sensitive multi-brand retail segment. Sources tell ET now FDI could be freed up for multi brand retail if the foreign retailers sell goods with the Made In India label. Sources say the government is looking at adopting an innovative manner in liberalising the politically sensitive sector to 100% FDI, and that is by following a policy of "Make In India, Sell in India".