FDI in multi-brand retail to be a political decision: DIPP

The issue is considered politically sensitive as over 90% of India's retail trade is in the unorganised sector — with kirana shops employing as many as 33 million people

A decision on foreign direct investment (FDI) in multi-brand retail would be taken by the political leadership of the country, according to R P Singh, secretary in the Department of Industrial Policy and Promotion (DIPP), reports PTI.

"Finally, the call has to be taken by the political leadership," he said, adding that his department is a "little guarded" because of "genuine concerns expressed" in the 5th July concept paper.

Unlike defence, where DIPP had suggested 74% FDI, it had left the issue of overseas investment caps open for debate in multi-brand retail.

Expressing hope that a decision would be taken by October, Mr Singh said, "We would like to take the views of stakeholders. I am trying to find a solution, which we think is optimal."

The issue is considered politically sensitive as over 90% of India's retail trade is in the unorganised sector — with kirana shops employing as many as 33 million people.

FDI is allowed only in single brand retail to the extent of 51%, while 100% is permitted in the cash-and-carry (wholesale) business. Domestic organised industry players are of the opinion that the sector should be opened up to foreign investment.

Single brand retail is mostly in sportswear and luxury brands.

Meanwhile, commerce and industry minister Anand Sharma is trying to allay concerns of possible job losses. "I definitely won't agree that there will be loss of jobs due to FDI," Mr Sharma had said in Singapore recently.

Bharti Group chief Sunil Mittal, who supported the move, opined that mere cash-and-carry was not enough. "Until we have end-to-end possibility, it won't work," Mr Mittal said. His group has a joint venture in the cash-and-carry segment with global giant Wal-Mart.

If allowed, global retailers like Wal-Mart, Tesco, Carrefour and Metro would be free to open front-end outlets for selling an array of products.

Mr Singh said that his department is sure India would be benefitted if overseas investment was allowed in defence production. This was the reason for the department proposing a high FDI cap of 74% in the sector, he said, adding that even 100% would be desirable.

However, the issue becomes more sensitive when it comes to retail, he said.

"In defence, we were 100% sure that it will be a win-win situation, and it means nothing but good for the country's gross domestic product (GDP) and manufacturing sector...as far as multi-brand retail, there are some concerns," he said.


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Das Auto: Why VW treats you like an autowallah

This Volkswagen buyer was not rooting for Germany during its World Cup run. Deutschland can keep its wheels, is what he feels

So curves are back and I plunked down Rs25 lakh to pick up that German beauty for my wife this January, only to realise that German engineers seem to be trained in Detroit and that their Teutonic contempt for us poor natives is getting along nicely.

It starts when you realise you can't test-drive their car - notwithstanding their ad budget, Volkswagen and their dealers can't afford a demo car. VW probably thinks - can't the natives just wrap their inferior minds around the fact that you don't test-drive drive an auto-rickshaw; and you don't test drive Das Auto. You wait your turn, my man, and take what you get.

Yes, then they assign a relationship manager to you. Mine is Fraulein Shama Chavan, who never takes my calls or answers text messages-yuck, answer an SMS from an autowallah? Nein, nein! The same is true of Herr Sagar, the customer relations manager listed on their website. He doesn't take calls and text messages either; I guess that speaks for the German passion for uniformity.

Oh yes, manufacturing defects are common in Das Autos. Mismatched reversing lights, vanity lights that don't work, a horrible grating noise from the brakes when you start the car, a radio whose volume control has a mind of its own-the marvel of German Engineering reminds you of Hindustan Motors in the 70's and 80's.

I am a finicky autowallah, when my Rs25 lakh Das Auto is delivered like a Rs80,000 auto-rickshaw, I complain. So I called up Ms Chavan-the Relationship Fraulein-and she promised to send a driver to pick up the car. She didn't. Another reminder and the driver came, took the car and explained that the guttural 'GROINK' at the start is a feature of the enhanced German Brake Technology; and the pirate-like one-eyed reverse-light is standard.

Then they just forgot my RC Book! Come on VW, even autowallahs don't face this. After weeks of follow-up, call-ducking and lost messages (do call up a VW office whenever you can - it is a training-camp for future bad BPO 'executives'), I got irritated.

So I wrote to the Head of this Das Auto Union, Joerg Mueller, and the President of VW India. Usually, I get some response when I write; perhaps a stock email, but some response. But Herr Mueller doesn't talk to us autowallahs either.

By the way, I got my 'Smart Card' RC Book in a few hours by approaching the friendly and efficient Deputy RTO of Navi Mumbai, Shri Rawat.

But I am a glutton for punishment. So the next week when I decided to drive down from Chennai to Mumbai, I asked the Downtown Motors guys to service the car and fix the mud-flaps. Guess what: they forgot the mud-flaps.

Das Auto is right. If you want to be treated like an auto-rickshaw fleet-owner, buy a VW; or just buy Japanese or Korean and get treated like a valued customer; or take an auto and get treated rudely for just 25 bucks, instead of Rs25 lakh.

(The author is the CEO of IDBI Asset Management Company)



pushkar kulkarni

6 years ago

moral of the story-all that makes noise is crass not class i e so calles german perfection is on paper .reality bites!!
vw still in colonial times OF LICENSE PERMIT RAJ??!! wake up and they have to smell indian tea.

i am happy with my santro and esteeem.


6 years ago

Surprising & not expected from Germans!!! But its true so all beetle fans better watch out ,than suffer.

Thanks for sharing this with us.

Suresh Gupta

6 years ago

It is really strange but why so. Customer today has great choices. These companies should learn or somebody else will serve the customer.



6 years ago

I wonder if similar to a customer treatment by the Manufacturer would be tolerated in Europe or other markets. Worse, if the manufacturer were an Indian company selling overseas.
Thanks for highlighting this.


6 years ago

I am reminded of Ford Car purchase in February 2009. Both the dealer & Ford went through the motions of Customer Feedback, but not interested in negative comments.


6 years ago

Thanks for the write up. This is a great eye opener.


6 years ago

Ha. Ha. Ha. Yuo hate Indians and they hate you. what is new there.

Y Not

6 years ago

Indeed apt and true. However, the single reversing light is an Indian regulation, which the firangs use to save that last bit, too. Achtung, Mein Frau and all that.

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