NEW DELHI — The issue was conspicuous from its absence in all discussions in Parliament on Wednesday, as the decision to bring multibrand retailing into India took a battering and was postponed until further notice. But, single-brand retail, which the cabinet cleared for 100 percent foreign direct investment on Nov. 24, was neither argued nor fought over by the opposition or the finance minister.
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A quiet celebration about the issue has begun, with retailers and mall developers looking at the prospect of more single-brand retailers coming into India, although they are still fraught with anxiety about the details and demands the government may write in the final document.
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Brands, such as Gap, that have been looking at India, and many similar brands that were discouraged by the prospect of finding the right Indian partner with which to share the image and prospects of their brands, can now start looking at the Indian market seriously once again.
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In the last five years, $44.5 million, less than 0.03 percent of total foreign direct investment into India, came in after the government allowed a 51 percent cap of FDI for single-brand retail. But, it did open the doors to a lot more brands, which changed the retail landscape in India with many new partnerships with Indian companies, such as Reliance Brands, DLF Brands, Major Brands and Planet Retail Holdings.
While economists argue that the Indian economy will suffer a setback compared with other BRIC countries, and it does not seem that the “stakeholders” the finance minister plans to include in a consensus on multibrand retail are going to come together at any point soon, there is optimism that these reforms will have to be pushed through within the next two years.
“We are convinced that good sense will prevail at some point and the consensus will emerge in some form,” said Kishore Biyani, chief executive officer of Future Group, which owns department store chains such as Pantaloons, Centrals and Big Bazaars.