FDI In Retail: Who Will Do The Back-end?

Not Carrefour definitely. All they want is the front-end part.

The company, that is keen to enter India in front-end retailing, has pointed out that the clause seeking investments into agriculture infrastructure, if made into law, would limit foreign investments.

Government sources told Business Line that the world's second largest retailer was willing to comply with regulation on local hiring and sourcing out of the country. It had, however, raised its reservations on the proposal asking foreign investors to invest in agriculture infrastructure.

It may be recalled that the DIPP had sought stakeholders' views on foreign direct investments in multi-brand retail trading.

In the paper it had detailed mandatory investments in “improving post-harvest management, cold storage and improving crop processing, among others.”

Though Carrefour's Executive Director Growth Markets, Mr Thierry Garnier, had met Indian Government officials recently and welcomed the DIPP's discussion paper on opening the sector, the company does not seem keen on the mandatory clauses.

Investment in the back-end is one of the big reasons given by supporters of FDI in multi-brand retail. Carrefour, one of the big retailers who is interested, says it is reluctant.