For starters, the government's placatory gesture in 2005 of permitting 51% FDI in same-brand stores came a little late- considering most of the big guns were already here (read: McDs, Nike, Marks & Spencer) through the franchisee route naturally. Market gurus for the longest time were skeptical about Wal-Mart's immediate plans for India. Why would the world's largest company settle for a mere 46% stake in its India venture (if and when that happened!) The buzz on the street was that the company would possibly enter only after a government assurance of hiking that FDI limit to over 70%. But the behemoth didn't exactly wait on the whims and reservations of the Indian government. It announced its interest in coming onboard through Sam's World, its cash and carry format.
Three hundred days later, the Bharti Wal-Mart deal was inked.
For me the more interesting news came in the form of this little snippet in the papers a few weeks ago that stated that it was UK retail giant Tesco that was originally in talks with Bharti for its India foray. It's a sign of the times when most big names in the international retail space, not just bellwether Wal-Mart are furiously dealmaking with any Indian Co willing to take the retail plunge or expand.
Then there are the existing MNCs in India like HLL that have been silently going retail. Few consumers see it as an Anglo-Dutch entity, so it isn't surprising that fewer still regard its home delivery based retail venture Sangam Direct as foreign! Ask them, and I have little doubt that they'll offer some fine print in the policy make-up or company structure that gives them the right to exist in the retail space.
But that's not the point at all...
The point is that these are classic cases of economic opportunism upstaging political intent.
Good news for consumers, bad news for the Indian retail companies going it alone, no thanks to the government who's given them little leeway-and kirana wallas? I think they'll find a way to co-exist, but not before they have bled some. Either ways lobbies, protests, petitions, demonstrations & dharnas may not prevent the big 'uns this time, after all they're charting a course that the policy framework couldn't hold back.first published:February 12, 2007, 13:07 ISTlast updated:February 12, 2007, 13:07 IST
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Even as the government is pussyfooting on FDI in retail, global retail giants seem to have taken the wind out of the debate by moving ahead and charting their India entry- policy encumbrances notwithstanding!
For starters, the government's placatory gesture in 2005 of permitting 51% FDI in same-brand stores came a little late- considering most of the big guns were already here (read: McDs, Nike, Marks & Spencer) through the franchisee route naturally. Market gurus for the longest time were skeptical about Wal-Mart's immediate plans for India. Why would the world's largest company settle for a mere 46% stake in its India venture (if and when that happened!) The buzz on the street was that the company would possibly enter only after a government assurance of hiking that FDI limit to over 70%. But the behemoth didn't exactly wait on the whims and reservations of the Indian government. It announced its interest in coming onboard through Sam's World, its cash and carry format.
Three hundred days later, the Bharti Wal-Mart deal was inked.
For me the more interesting news came in the form of this little snippet in the papers a few weeks ago that stated that it was UK retail giant Tesco that was originally in talks with Bharti for its India foray. It's a sign of the times when most big names in the international retail space, not just bellwether Wal-Mart are furiously dealmaking with any Indian Co willing to take the retail plunge or expand.
Then there are the existing MNCs in India like HLL that have been silently going retail. Few consumers see it as an Anglo-Dutch entity, so it isn't surprising that fewer still regard its home delivery based retail venture Sangam Direct as foreign! Ask them, and I have little doubt that they'll offer some fine print in the policy make-up or company structure that gives them the right to exist in the retail space.
But that's not the point at all...
The point is that these are classic cases of economic opportunism upstaging political intent.
Good news for consumers, bad news for the Indian retail companies going it alone, no thanks to the government who's given them little leeway-and kirana wallas? I think they'll find a way to co-exist, but not before they have bled some. Either ways lobbies, protests, petitions, demonstrations & dharnas may not prevent the big 'uns this time, after all they're charting a course that the policy framework couldn't hold back.
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