India opens to foreign retailers

Multinational retailers will be able to own shops and sell directly to consumers in the Indian market.

The Council of Ministers approved the opening of the retail market to foreign investment allowing them to take a 51% stake in multi-brand retail. So far, foreign retailers could not sell directly to consumers, but only have a wholesale business.

However, the new law will contain certain conditions. Foreign retailers will have to invest a minimum of 100 million dollars in the country, at least half of the investment in infrastructure. Other conditions include only allowing stores in cities with a population of 1 million people and having 30% of the products sourced locally.

Organised retail only accounts for 5% of the retail market in India, according to the Chamber of Commerce and Industry. The retail trade is estimated at 470 billion dollars and is expected to reach 785 billion USD in 2015.

source : afp