The foreign companies coming to India will have to depend on IT companies for hardware deployments, surveillance tools, display technologies and location-based services
NEW DELHI, INDIA: Despite resistance from various federal states, the Cabinet has paved the path for 51 per cent foreign direct investment (FDI) in the multi-brand retail sector. This has come as a jolt for regional political leaders, but IT industry has a reason to smile.
With Prime Minister Manmohan Singh coming out with full throttle on big ticket reforms, the retail chain giants are expected to seize the opportunity and swell the existing $450 billion Indian retail market.
From farm to fork, the IT/ITes (not excluding telecom) are poised to play strategic role. The industry pundits feel that supply chain management and warehousing would witness IT hardware deployments, besides customized software, surveillance tools, display technologies and location-based services (LBS).
Speaking to CIOL, ICRIER (Indian Council for Research on International Economic Relations) director professor Rajat Kathuria said that allowing FDI in retail is a good move. "Physical infrastructure will be relied on robust supply chain driven by IT," he said.
With certain safeguards, Kathuria said, it will help industry in a big way. “Multi-brand retail stores will facilitate IT hardware purchase, and logistics companies will come to the fore, hence, it will boost the industry,” he added.
MAIT president and Canon India SVP Dr Alok Bharadwaj believes that FDI in retail would open multiple opportunities for the IT industry. This, he said, will have multi-fold positive impact and investment around infrastructure and expansion would be expected.
"IT hardware, software and applications deployment; implementation of display technologies; and networking for real time management will see huge traction," Bharadwaj said. Leveraging technology, he said, could save crop from rot and allow farmers to get fair price for their produce.
Multi-brand retail chain stores, Bharadwaj feels, would also be an another extension for consumer IT products. With chain stores like Walmart, the reach of IT consumer products would increase across 5,000 cities in the country.
NASSCOM vice-president Ameet Nivsarkar said that FDI in department stores is a welcome move and it will expand the market opportunities. "The prominence of logistics and retail supply chain in the sector will spur new IT investments," he said.
Nivsarkar feels that the overall impact would be positive on the industry. This, he said, would help IT ecosystem to prosper by tapping multiple areas of interest.