SMEs for FDI in multi-brand retail: Survey

SMEs for FDI in multi-brand retail: Survey

A CII survey finds 66.7 p.c. SMEs see the new FDI policy as an opportunity while around 21 p.c. perceive it as a threat. About 12.5 p.c. are of the opinion that the decision will have little or no impact on their business

Tuesday, January 31, 2012

NEW DELHI, INDIA: The Indian small and medium scale enterprises (SME) supports 100 per cent Foreign Direct Investment (FDI) in single-brand retail and expects earlier and speedier implementation of 51 per cent FDI in multi-brand retail, reveals a survey.

The survey, conducted by the Confederation of Indian Industry (CII) on the impact of FDI in retail, also

finds that the government’s decision of mandatory sourcing of a minimum of 30 per cent from Indian SMEs will help them achieve higher growth in sales, size of the industry, capacity addition, increased contracts/ orders, qualitative improvements and branding of the products, technology upgradation, employment etc.

“India’s growing retail boom is a success story. The 51 per cent FDI in multi-brand retail and its early implementation would give a major boost to the all round growth of the organized retail sector and it will have a substantial positive impact on the growth of SMEs,” says Chandrajit Banerjee, director general, CII.

The survey further reveals that almost 96 per cent of the respondents surveyed are aware of the government’s earlier decision to allow 100 per cent FDI in single brand retail and 51 per cent FDI in multi-brand retail and also of the latest notification in January this year.

On the question of how the SME industry considers entry of MNC retailers as a threat or opportunity, majority of respondents (66.7 per cent) see it as an opportunity for their sector while around 21 per cent of respondents perceive it as a threat. About 12.5 per cent of respondents are of the opinion that the decision would have little or no impact on their business.

Majority of the respondents (98.6 per cent) are of the opinion that the opening of the FDI in retail will augment growth of sales of their products. Of them, around 21 per cent respondents foresee the growth of sales of their products to escalate in the excellent range of more than 20 per cent, 31 per cent expect the impact on growth of sales to be in the high range of 10-20 per cent while 33 per cent expect it to be in moderate range 5-10 per cent.

As much as 8 per cent of the respondents perceive the growth to remain in a low range (0-5) category while 6 per cent feel that the decision would have a negative impact on the growth of sales of their products.

©CIOL Bureau