Confederation of Indian Industry calls for a calibrated approach

With the issue of allowing 51 per cent foreign direct investment (FDI) in multi-brand retail rocking Parliament on Monday, India Inc was seen speaking in different voices although in support of the issue.

Federation of Indian Chambers of Commerce and Industry Secretary General Rajiv Kumar at a press conference here extended all-out support to the government move while on the other hand the Confederation of Indian Industry (CII) called for a calibrated approach in introducing FDI in the retail sector in terms of the percentage and minimum capitalisation requirements.

Mr. Kumar said that opening of the retail sector would create big employment opportunities. He said those industry associations which were opposing the foreign direct investment in multi-brand retail had a vested interest. “This is just a fear that has been created for some vested interest. FDI in retail will be a game-changer like telecom. I see only positive impact on employment,'' he remarked. However, the CII said that while it strongly supported the introduction of FDI in multi-brand retail, it recommended a calibrated approach for introducing FDI in the retail sector in terms of the percentage and minimum capitalisation requirements.

Some traders' associations are arguing that about 40 million employed in this sector would loose their earnings because of opening of big foreign retail stores. “In fact, foreign stores will generate employment and that will be higher quality employment. Small stores would also increase their employment to compete with the big retailers,'' he said.

The CII said FDI in multi-brand retail would give a boost to the organised retail sector, which positively impacted several stakeholders, including producers, workers, employees and consumers and the government and, hence, the overall economy. Opening up of FDI can increase the organised retail market size to $260 billion by 2020.

This would result in an aggregate increase in income of $35-45 billion a year for all producers combined; 3–4 million new direct jobs; and around 4–6 million new indirect jobs in the logistics sector, contract labour in the distribution and re-packaging centres, housekeeping and security staff in the stores.

FICCI said FDI would bring about the development of a robust supply chain which in turn would integrate farmers and small and medium size enterprises into the modern trade process, resulting in knowledge and skills transfer, ensuring farmers and SMEs receiving higher prices for their produce/supplies, providing a more transparent mechanism for pricing, helping in planning their supplies.


  • It will create big employment opportunities: FICCI
  • A boost to the organised retail sector: CII