FDI in Indian retail, but when?

India’s finance minister P. Chidambaram said that government approval of foreign direct investment (FDI) in India’s US$330bn retail sector is only a matter of time. Small shop owners still need to be convinced. “We will patiently educate them before they accept retail chains. This will take a little time”, he said on a visit to Wharton School, University of Pennsylvania.

The finance minister confirmed that there will be no negative impact of FDI on India’s retail sector, so there is no need for fear among small shop owners. “Experience tells us retail does not drive them out. They will reorganise themselves and thrive. However, there is genuine fear that has to be allayed”, he was quoted by the Indian Times’ economic newswire.

Chidambaram didn’t say how long ‘a little time’ will be. Multinational retailers have since long been waiting for India’s promising retail sector to finally open up. Multinational retailers have been joining forces with local companies to find a way of building a business in India while complying with the – still – strict laws on FDI.

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