Western supermarkets are salivating at the prospect of being allowed to enter the Indian market directly for the first time
India regarded as a mouth-watering target by internation
supermarket chains could be about to oblige.
Reports on Wednesday say the Indian cabinet will discuss allowing foreign "multi-brand" retailers supermarkets and chain stores to own 51% of Indian operations. For "single-brand" retailers the likes of Gucci or Nike - the current 51% limit could be raised to 100%.
This is something Tesco, Wal-Mart and Carrefour have been waiting for. At the moment they are restricted to investing in wholesale operators that cannot sell to the public, or backing franchise partners. Tesco is doing the latter: it has had an agreement with Trent, the retail arm of the giant Tata group, since 2008.
A relaxation of the foreign direct investment rules, however, potentially changes everything. Tesco, for example, already has 100 supermarkets in China, a country that has been far more welcoming to foreign shopkeepers in recent years.
India's small retailers the millions of kirana shops are naturally appalled by the threat of western giants on their doorsteps. The Indian cabinet, though, seems persuaded that foreign retailers will bring better logistics and help to put a cap on inflation in food prices.
It is hard, though, to see the development doing much for the Indian tourism industry. "Incredible India" accurate is a much better slogan than "we've got Tescos, too".
Nils Pratley (Business) Posted by Nils Pratley Wednesday 23 November 2011 13.47 GMT guardian.co.uk
India regarded as a mouth-watering target by internation
supermarket chains could be about to oblige.
Reports on Wednesday say the Indian cabinet will discuss allowing foreign "multi-brand" retailers supermarkets and chain stores to own 51% of Indian operations. For "single-brand" retailers the likes of Gucci or Nike - the current 51% limit could be raised to 100%.
This is something Tesco, Wal-Mart and Carrefour have been waiting for. At the moment they are restricted to investing in wholesale operators that cannot sell to the public, or backing franchise partners. Tesco is doing the latter: it has had an agreement with Trent, the retail arm of the giant Tata group, since 2008.
A relaxation of the foreign direct investment rules, however, potentially changes everything. Tesco, for example, already has 100 supermarkets in China, a country that has been far more welcoming to foreign shopkeepers in recent years.
India's small retailers the millions of kirana shops are naturally appalled by the threat of western giants on their doorsteps. The Indian cabinet, though, seems persuaded that foreign retailers will bring better logistics and help to put a cap on inflation in food prices.
It is hard, though, to see the development doing much for the Indian tourism industry. "Incredible India" accurate is a much better slogan than "we've got Tescos, too".
Nils Pratley (Business) Posted by Nils Pratley Wednesday 23 November 2011 13.47 GMT guardian.co.uk
