SME Times News Bureau | 30 Nov, 2011
While complimenting Anand Sharma, Commerce, Industry and
Textile Minister, on permitting the multi-brand retail FDI, FIEO, President Ramu
S Deora stated that at least 30 percent of sourcing from domestic small units,
artisans, craftsmen, cottage units would provide further boost to exports.
Deora said that units supplying to large retailers will
achieve requisite quality and price competitiveness to graduate to exports.
This will largely benefits exports of textiles, leather, gems and
jewellery, handicraft, jute, coir and other life style products.
This will also create jobs in these sectors and enhance their
capabilities as retail buyers buy in bulk for their global
re-distribution observed Deora.
Chile has been largely benefitted with Multi brand retail in pushing its
exports of Wine and fruits across the globe, FIEO chief explained, adding that
a Boston Consulting Group (BCG) study estimates that building modern retail
supply chain in India requires an investment of USD 30 billion. To enable
these, fund in-flows would be facilitated in an environment which is otherwise
investment negative with falling rupee and would contain to some extent
the ever inflating import bill as a result of its down march. FDI inflows will
also help in arresting weakening of Rupee as well.
The strengthening of supply chain will address the problem of storage, lack of
refrigerated facilities and transportation facilitating exports of fruits,
vegetables and food grains, said Deora.
Farmers will be able to access the world market as efficient producers sellers
linkage will be established which will be more remunerative for
producers.Indian farmers receive only 30 percent of price paid by consumers as
compared to 50 to 70 percent in developed markets. A structured retail
would therefore, enable better price discovery observed Deora.
Deora suggested that since many of the farmers have marginal holdings Central/
State Governments may evolve appropriate policies so that the marginal holdings
can be combined for contract farming for large retailers to ensure economies of
scales /usage of technical and productivity tools to enable higher productivity
levels.
A suitable clause may be inserted in the provisions while it is still being
deliberated such that FDI in the sector may contribute in terms of technical
inputs/financing keeping in view the sensitive nature of subsistence farming in
the country and ensure that they are part of the inclusive growth agenda of the
Government. This would also assuage the concerns of those opposing the
implementation of the same.
Deora added that Euro zone crisis provide opportunity to Indians to make
investment in Europe and banks should provide full support for the same. China
is already investing in Euro areas and why not India, quizzed Deora.