| To hammer in his point of options before the people,
Singhal pointed out that in Delhi, for example, the local weekly markets
('haats') are "flourishing rather than vanishing." He adds,
"Simply because there is no modern space available and politicians
don't understand this fundamental fact (while opposing foreign direct
investment in the retail sector)."
Making a strong case for foreign investment in the retail sector,
Singhal was emphatic that such investments would not swamp indigenous
companies.
"Take the textile industry, for example. There is no restriction
on FDI as far as this sector is concerned. However, India picked
up less than $0.5 billion of FDI in the last 12 years, whereas China
picks up about $8 billion per year. This answers the question that
no one is waiting here to come and kill Indian industry. FDI is
to do with the perception about the attractiveness and stability
of the country," Singhal counter-punched the critics of throwing
this sector for foreign investment.
Pointing out that the Indian consumer too has evolved in the last
decade or so demanding good services that are "friendly and
convenient", Singhal said arrival of international franchisees
like McDonald's "has not managed to eat into the shares of
Indian players like Haldiram's."
According to him, "There is absolutely no threat at all from
international franchisees entering into India."
While Singhal and his company were trying to champion the cause
of the retail industry, earlier in the day today commerce minister
Kamal Nath told an audience at an apex chambers of commerce that
any policy decision relating to FDI would be taken keeping in mind
that Indian retailers don't get "displaced."
"The nature of the retail sector in India is too complex for
a hasty decision and the fixation of permitting or not permitting
FDI is misplaced," Nath said at a seminar on 'Retailing in
India: FDI and Policy Options for Growth,' organised by the Federation
of India Chambers of Commerce and Industry (FICCI).
Nath cautioned that the thrust to the retail sector by the government
would have to be seen in the overall context of the sector specific
policies. This goes with the overall national objective of rejuvenating
specific targeted sector, including the rural sector.
Asked what sort of investment is being made in developing shopping
malls and retailing that's enhancing the `total' shopping and entertainment
experience for Indians, Singhal said the company estimates it would
be approximately Rs 150 billion.
Meanwhile, Singhal stressed that the retail summit has seen a level
of maturity in the last few years with participation from many serious
companies in the market.
"Consumer products companies have started to realise that
they need to understand the retail industry much better than they
have done so far. People expect a lot more consistency in the format
of our summit. Our workshops have also now reached some kind of
a steady state," Singhal says.
He stressed that it is not their core agenda to maximise revenue
from the event, but create awareness about the industry and provide
a platform.
"Our objective is not about increasing the number of people
attending our summit, instead it is to bring those people on board
whom we would like to consult with and who are significant in this
sector for consumer goods," Singhal said.
KSA Technopak is the Indian subsidiary of Kurt Salmon Associates.
Technopak was started in 1992 as a management-consulting firm focused
on the consumer product niche. In late 1992, it commenced a working
relationship with Kurt Salmon Associates, which developed into a
joint venture in 1996, when KSA took an equity position in the Indian
practice.
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