India Allows FDI In Supermarket Sector Amid Resistance

By P.Vijian NEW DELHI, Nov 25 (Bernama) -- India warily opened up its highly-guarded supermarket sector to foreign investors on Thursday, but assured farmers that influx of outside capital would not harm their livelihoods. Commerce and Industry Minister Anand Sharma allayed fears among political critics and farming communities, saying the move would ultimately reward the Indian economy. "The policy is the need of the hour and is an investment in the present and the future. It will immensely help Indian farmers and create jobs in the agricultural and food-processing industry," he told the media on Friday. Indian government approved 100 per cent equity in the single-brand retail sector and 51 per cent foreign direct investment in the multi-brand retail segment -- allowing global players to enter the Indian market. India's supermarket sector, estimated at US$450 billion (RM1.44 trillion), had been closely protected from foreign competition to safeguard small-scale retailers and farmers. Sharma said the new FDI policy would create 10 millions jobs in the next three years and help slash post harvest losses of nearly 40 per cent, a nagging concern for Indian policy makers. "This would open up enormous opportunities in India for expansion of organised retail and allow substantial investment in back-end infrastructure like cold chains, warehousing and logistics," added B.Muthuraman, president of the Confederation of Indian Industry (CII). But the fresh FDI policy, a major boost towards India's economic reforms, comes with strict riders -- a US$100 million (RM320 million) minimum foreign investment and 30 per cent of the goods have to be sourced from local suppliers. Besides, about 50 per cent of the foreign investment would be used to build vital infrastructures -- cold storage facilities and logistic networks. --BERNAMA Malaysia