Facilitate local sourcing standards in single-brand retail to help companies consolidate their investments: experts
New Delhi, July 5 () The government's decision to relax the conditions of local hiring for foreign direct investment (FDI) in the retail trade of a single brand would offer a certainty to the companies that seek to invest in the sector, say the experts
Deloitte's partner, Anil Talreja, said that while it would depend on the exact details of the relaxation of procurement rules, the announcement clearly presents the carpet once again for the single-brand retail companies in India.
Many of these companies were sitting on the border in a dilemma about investing in the Indian market due to the difficulty in meeting these supply conditions, he said.
These companies will certainly have to re-analyze their strategy to take advantage of India's great consumption potential. Now it would be a race for all these retail companies to evaluate the conditions and make a quick decision to invest in India, he said.
The president of the Indian Association of Cell Phones and Electronics, Pankaj Mohindroo, said that single-brand retail adds to the country's economy and in no way alters the balance of organic retail.
Because of its centrality, single-brand retail promotes the brand, improves retail standards, maintains the sanctity of the price intact, which does not exert predatory pressure on our small retailers, he said.
On Friday, the government proposed further relaxing the rules of FDI in the retail sector of a single brand in order to attract more foreign investment.
Finance Minister Nirmala Sitharaman in her budget speech said that local sourcing rules will be made available for FDI in the single-brand retail sector.
He has also proposed to consider relaxation in FDI standards in sectors such as aviation, media, AVGC (animation, visual effects, games and comics) and insurance.
Commenting on this, Jehil Thakkar, a partner at Deloitte, said that greater investment in media and animation services is key to taking advantage of the opportunities created by the drop in data charges. A greater investment in animation will also serve to make India a center for animation and visual effects worldwide, he added. RR ANS ANS