Government Relaunches FDI Retail Reforms
News: The Indian government has relaunched foreign direct investment (FDI) reforms in the country's retail sector on September 14 2012, reports just-food.com. However, states will have the power to block the opening of multi-brand outlets backed by overseas capital. The move came nine months after the government suspended its initial efforts to allow foreign firms to acquire a 51% stake in multi-brand outlets amid opposition from political parties and some retail chains. Additionally, the new guidelines state that stores should only be set up in cities with a population of more than one million.
BMI View: Over the long term, India is one of the most exciting mass grocery retail (MGR) opportunities in the Asia Pacific region. Indian consumers are still largely familiarising themselves with the concept of modern retail, which accounts for less than 10% of overall grocery retail sales, according to BMI estimates. Nonetheless, there are going to be tremendous opportunities for growth given the underdeveloped nature of the Indian MGR sector.