The Hindu : Business : Govt. looking at model to allow FDI in retailing

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Saturday, Jul 02, 2005

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Business

Govt. looking at model to allow FDI in retailing

Special Correspondent

Cold chains, packaging issues to be addressed through technology

REVAMPING RETAILING: The President of FKCCI, S. Babu (right), greeting the Union Minister for Commerce and Industry, Kamal Nath, at an interactive session in Bangalore on Friday. — Photo: Murali Kumar K.

BANGALORE: While assuring the retail sector that the "mom and pop shops" would not be displaced or replaced, the government is looking at a model for allowing foreign direct investment (FDI) in retail, the Union Minister for Commerce and Industries, Kamal Nath, has said.

Addressing members of the Bangalore Chambers of Industries and Commerce (BCIC) and the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) on Friday, Mr. Kamal Nath said as 98 per cent of the retail sector was in the unorganised sector, issues such as cold chains, packaging, and logistics management needed to be addressed through technology and wondered whether the "mom and pop shops" would be able to handle them. "We want to be able to take care of the consumer growth."

Non-tariff barriers

The challenge during the next round of the WTO would be that of non-tariff barriers which had become an instrument of the developed countries and some of them were insisting on certain kinds of packaging, and pension laws. "We will take up the issue of non-tariff barriers strongly."

Developed countries wanted agriculture market access here, he said and categorically stated that "we will not give access with all the subsidies the developed countries give to agriculture. In India it is subsistence agriculture and not commerce the way it is in the developed countries. The farm subsidies in Organisation for Economic Cooperation and Development (OECD) countries amounted to a billion dollar a day.

"Our agriculture base will not be able to sustain such forays." Similarly, India will not give access to financial services.

Underlining the importance of small and medium enterprises (SMEs), Mr. Kamal Nath said India would engage the WTO with its strengths in the manufacturing sector, particularly SMEs. "We would make sure that Indian industry is protected and supported."

About regional blocs helping trade, he said that India would have to engage itself in regional cooperation and also globally. "The economic cooperation with Singapore is a move in this direction. We see Singapore as an investment hub and a gateway to the ASEAN bloc." Indian imports have risen by 42 per cent in the first quarter and this would stimulate the manufacturing sector. The focus, he said, would be employment generating exports, away from dollar generating exports. The country's external trade stood at $185 billion with exports accounting for $85 billion and imports $100 billion, including $30 billion of oil imports.

The government would expedite the data protection and data exclusivity bills, he said and remarked that Bangalore deserved a patent office.

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